Now there is a phase of boom in the share market and it is in a different sector. In such a situation, the fund manager has changed his portfolio.
In the category of equity mutual funds, there is increasing interest of investors regarding focused equity funds. According to the SEBI scheme classification mandate, there can be a maximum of 30 stocks in the portfolio of such funds. The outstanding performance of ICICI Prudential Focused Equity Fund has caught the attention of this category. This fund has been consistently outperforming and has been ahead of all other schemes in this category by giving its investors a solid profit of 50 percent in the last year.
Not only this, if we look at the average returns of the category, then it shows that ICICI Prudential Focused is 15 percent ahead of other counterparts. Focused funds aim to provide higher returns by investing in a limited number of trusted stocks that have the potential to register strong growth.
Advantage of strengthening rural economy
If the ideas of a more reliable stock prove to be true, then getting the profit becomes a reality. This is what has happened in the case of ICICI Prudential Focused Equity Fund. During the epidemic, the fund manager focused his attention on such portfolios and themes, which could also benefit from the disruption caused by the impact of COVID-19. Its focus was on investing in strong balance sheets and high-earning companies. There were weighty names in the portfolio that had the potential to deal with supply chain disruptions even in the coming quarters. One of the reasons for the fund’s performance was also that the rural economy was connected to it, which continued to benefit from the sustainable demand of the rural economy and this strategy worked very well for the fund.
Market boom
Now there is a boom in the markets and it is in a different area. In such a situation, the fund manager has made changes in his portfolio, so that a new series of winners can be created. Due to the ease of going into all types of themes / market caps and the comparatively small size of the fund, there are ample opportunities for stock selection.
Stocks that become part of the portfolio indicate that its theme is broad-based. Exposure to this scheme is in many areas, which are expected to benefit from the overall economic recovery. There are names in the portfolio that can benefit from the growth in credit growth and capex cycle, real estate etc. This portfolio has excellent exposure to large financial companies, which can benefit from cycles of economic recovery (better credit growth and lower debt costs) and PSUs.
Mutual funds are withdrawing money despite the stock market boom; 8th consecutive month selling
CAGR profit of 15 percent
Apart from its one-year performance, the fund has given profits of 13 per cent and 15 per cent CAGR respectively for three or five years. This has been possible because focused bets were placed and it performed better over time. Given the nature of the portfolio, it is important to keep the investment for at least 3 to 5 years, which gives the investment research manager a chance to work fully.