ICICI Prudential Asset Management Company Limited

ICICI Prudential Bluechip Fund - Growth

.EquityLarge Cap
  • Plan: Regular
  • |
  • Type: Open-Ended
  • |
  • Option: Growth
  • 1 yr return11.4%
  • 3 yr return17.8%
  • 5 yr return12.8%
  • Expense Ratio1.68%
  • Lock-in Period--
  • Exit Load1%
  • Fund Size (Cr)Rupees34823.2
  • NAVRupees71.7

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Analysis

ICICI Prudential Bluechip Fund - Growth

ICICI Prudential Asset Management Company Limited is a joint venture between ICICI Bank, India’s Leading Private Sector Bank and Prudential plc of the UK, one of the largest financial services providers. Established in 1998, ICICI Prudential AMC Ltd. is the 3rd largest AMC in India with over Rs.350,000 crores of Assets under management, offering a variety of Mutual Fund schemes in different asset classes to investors.

 

Investment Objective of ICICI Prudential Bluechip Fund

ICICI Prudential Bluechip Fund is an open ended equity scheme predominantly investing in large cap stocks with the investment objective to generate long term capital appreciation and income distribution to investors from a portfolio that is predominantly invested in equity and equity-related securities of large-cap companies.

 

Suitability

ICICI Prudential Bluechip Fund is suitable for investors with moderate to high-risk appetite looking to invest for over a period of 5 years & above.

 

Taxation of ICICI Prudential Bluechip Fund Growth

 

Following taxation is applicable:

  1. If the units are held for more than 1 year, then the gains are treated as Long Term Capital Gains(LTCG). LTCG of up to Rs 1 lacs are tax-free and above that, it is taxed at the rate of 10% without the benefit of indexation.
  2. If the units are held for less than 1 year, then the gains are treated as Short Term Capital Gains(STCG) and are taxed at the rate of 15%.

 

What are Large Cap Funds?

Large Cap Funds are those funds that invest a major portion of their corpus in companies with Large market capitalization. These funds invest in Large Cap companies. As per SEBIs categorization these are the top 100 companies in terms of market capitalization.

 

Why should you invest in Large Cap Funds?

Large Cap Funds invest in reputed companies with a large market share, strong financials, and strong corporate governance practices. These companies have a well-established track record of performances and hence have the potential to offer stable returns to the investors.

Investments in Large caps are relatively less risky than the mid-cap and small-cap categories because of their financial stability. This makes Large Cap Fund investment most suitable for conservative investors willing to take exposures in equity.

You should invest in these funds to gain long term capital appreciation with stable returns and relatively lower risks.  

Benchmark

The Benchmark for the Scheme is NIFTY 100 TRI.

 

ICICI Pru Bluechip Fund NAV

The NAV or Net Asset Value is simply the Mutual Fund’s per unit Market Value, the rate at which investors can buy/sell the units in the market. It is calculated by dividing the total market values of the securities in the portfolio by the total number of units.

NAV of the mutual fund varies on a daily basis from the change in the market prices of the securities held in the portfolio. As per SEBI Guidelines, the NAVs of the scheme are updated by 11.00 pm every business day by the AMCs on their websites and AMFI’s Website.

The investors can check the updated NAVs of the scheme on the ZFunds. They can also check the Latest NAV on ICICI Prudential Mutual Fund’s website and on the website of the Association of Mutual Funds of India.

 

ICICI Prudential Bluechip Fund’s Asset Allocation

Under normal conditions, the fund will invest at least 80% of its corpus in equity & equity securities of Large Cap companies. The balance corpus, i.e. up to 20% will be allocated in equity & equity-related securities other than large-cap, and in debt & money market securities.

The fund manager may diverge from the stated asset allocation pattern depending upon the market conditions, opportunities & economic factors as per his discretion in the favorable interests of the unitholders for a temporary period.

 

ICICI Prudential Bluechip Fund Investment Restrictions

The Scheme cannot invest more than 10% of its assets in debt securities including money market instruments and non-money market instruments issued by a single issuer. Such investment limit may be extended to 12% by the prior approval of the Board of Trustees and the Board of directors of the asset management company.

  • The mutual fund scheme cannot invest more than 10% of its assets in unrated debt instruments by a single issuer and a maximum of 25% can be invested in such instruments.
  • The Scheme can make investments in the other schemes of the same AMC or the schemes of other AMCs, but such investments should be limited up to 5% of the total assets of the fund without charging any management fees.
  • The mutual fund Scheme cannot make investments in any unlisted securities of an associate or group company of the sponsor.
  • The scheme cannot invest in any Fund of Funds schemes.
  • The Fund cannot own more than 10% of any company‘s paid up capital carrying voting rights.
  • The Fund can only borrow for meeting temporary liquidity needs and is allowed to borrow not more than 20% of its assets for a maximum period of 6 months.
  • The Scheme cannot pass loans against the units to the investors.

For more details regarding the other Investment Restrictions, you can read the Scheme Information Document available at ICICI Prudential Mutual Fund’s Website.

 

Risk Factors

Risk Factors associated with Equity Exposures

  • The investment decisions taken by the Fund Manager & AMC might not be profitable every time due to several issues.
  • The NAV of the fund or the value of the investment can be affected by several market or security-related factors including price and volume volatility in the capital markets, interest rate changes,currency exchange rates, changes in Government policies or any other economic factors.
  • The Mutual Fund may not be able to sell/lend out securities, which can lead to temporary illiquidity. Security lending may sometimes lead to losses as in the case of the other parties failing to meet the terms & returning the securities.
  • There is no assurance that the fund may continue paying dividends in the future as the underlying holding companies may not declare or declare less dividends.
  • Securities not listed on exchanges are risky compared to ones listed, as they are illiquid in nature and hence exposed to high liquidity risk. The Fund may make investments in these securities in limits as per the regulations.
  • Listed Securities have lower liquidity risks however there are limits in selling these securities as imposed by the Exchanges.
  • Changes in taxation rules & government policies can have an impact on the returns for the investors as well as business-related returns.
  • The Fund manager endeavors to generate returns based on historical trends, however there is no assurance on whether these historical trends will continue or not.

 

Risk Factors associated with Debt Exposures

The main risk factors associated with the debt exposures in the scheme are as follows:

Interest Rate Risk: Interest Rate risk is the risk associated with the changes in Interest rates in the economy. A rise in the interest rates in an economy will result in the fall in the NAVs of the scheme and vice-versa.

Credit Risk: Credit Risk refers to the risk associated with the Borrower’s failure to meet the principal and/or interest payments. All debt instruments carry this risk. Generally, government securities have very little credit risk as compared to the other debt securities including corporate bonds.

Price Risk: As long as the Scheme remains invested, its Net Asset Value (NAV) would be exposed to market fluctuations, and its value can go up as well as down as a result of instrument-related or macroeconomic factors.

Market Risk: Market risk is the risk of volatility in NAVs of the fund arising from the conditions affecting the overall markets. The factors can be inflation, changes in government policies, natural calamities, interest rate changes or liquidity issues etc.

Liquidity Risk: A lower level of liquidity in the market may affect values of the securities. Lower Liquidity in the market leads to difficulties in selling or redeeming securities in the market. In such a case, the fund may have to bear extra costs or may find it difficult to sell units at lower prices.

• Risk related to investment patterns: Different types of securities have different levels of risk associated with them. For Example- AAA papers are less risky than AA-rated papers or bonds. Any changes in the investment patterns of the scheme can have an impact on the riskiness of the scheme. 

Duration Risk: Debt securities with higher duration could be riskier in terms of price movements relative to those with lower duration. Thus any changes in the interest rates will have more impact on the securities with the higher durations.

Concentration Risk: Concentration risk can arise if the portfolio of the fund is highly concentrated, i.e. exposed to a particular sector, company, or bond. 

For reading more about Risk Factors associated with this fund, you can read the Scheme Information Document available at ICICI Prudential Mutual Fund’s Website.

Top Large-Cap Funds 

ZF RankFunds3 Year Returns Annualized5 Year Returns Annualized
1Axis Bluechip Fund Growth7.535.92
2Mirae Asset Large Cap Fund Growth-0.893.67
3ICICI Prudential Bluechip Fund Growth-2.541.52

                                                                              as on 31st March 2020

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Investment Objective

To Generate Long Term Capital Appreciation And Income Distribution To Investors From A Portfolio That Is Predominantly Invested In Equity And Equity Related Securities Of Large Cap Companies.

Tax Implications

Taxation on mutual fund explained : https://zfunds.in/article/taxes-on-mutual-funds

Top Holdings

  • Companies %
  • ICICI Bank Ltd. 9.6
  • TREPS 8.2
  • Reliance Industries Ltd. 7.9
  • HDFC Bank Ltd. 7.7
  • Infosys Ltd. 7
  • Larsen & Toubro Ltd. 6.3
  • Axis Bank Ltd. 5.7
  • Bharti Airtel Ltd. 3.8
  • SBI Life Insurance Company Ltd. 3.1
  • Maruti Suzuki India Ltd. 2.9
  • Ultratech Cement Ltd. 2.7
  • Sectors %
  • Banks25
  • Internet and Technology12
  • Petroleum Products8.9
  • Cash/Deposits/Margins/Treps/Repo/Swaps8.1
  • Automobiles7.3

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