Effective from May 28, 2018, as per its new mandate, the two-decade old fund will begin a gradual shift from large-cap stocks to mid-cap stocks. As per the new mandate, ICICI Prudential Large & Mid Cap Fund will need to invest a minimum of 35% each in largecap and midcap stocks respectively. Needless to say, the maximum limit is capped at 65% for each.

The renamed scheme also has the flexibility to invest upto 30% of its portfolio in stocks that do not belong to the above market caps. Apart from equity, the fund can invest up to a maximum of 30% in cash and debt.

The erstwhile fund, which used to maintain an exposure of 75%-80% in large caps, will need to reduce its exposure and move to midcap stocks. Thus, investors who continue to hold their investments will need to prepare for additional volatility. Midcaps, though volatile, also have the potential to deliver supernormal returns if carefully picked. Thus, existing investors should keep a long-term outlook.

The fund continues to be managed by ace fund manager Mr Sankaran Naren.

Among Large Cap Funds, ICICI Prudential Top 100 Fund has been a reasonable performer. It may not have been among the best, but the return potential of the scheme looked promising, given its strong investment management team.

Going ahead, it needs to be seen whether the fund can up its performance based on the new market-cap allocation mandate. The investment style is expected to follow the value style of investing, as that has been the strength of the fund manager.

It needs to be seen if the fund will be able to reward investors suitably with its new investment focus.

In this brief analysis, we take a close look at the features and performance of ICICI Prudential Large & Mid Cap Fund, in its previous avatar.

For the entire list of scheme names changes, do read: Your Mutual Fund Scheme Renamed. What Should You Do?

Investment Objective of ICICI Prudential Large & Mid Cap Fund

ICICI Prudential Large & Mid Cap Fund has an investment objective to "generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related securities of large-cap and mid-cap companies."

The erstwhile fund, ICICI Prudential Top 100 Fund had an investment objective to "generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related securities"

ICICI Prudential Large & Mid Cap Fund Details

Fund Facts

Category	Large & Mid Cap	Style	Blend
Type	Open ended	Market Cap Bias	Large & Mid Cap
Launch Date	15-Jul-98	SI Return (CAGR)	18.94%
Corpus (Cr)	Rs 3,120	Min./Add. Inv.	Rs 5,000 / Rs 1,000
Expense Ratio (Dir/Reg)	1.03% / 2.19%	Exit Load	1%

Portfolio Data as on May 31, 2018.
SI Return as on June 14, 2018.
(Source: ACE MF)

Under normal circumstances, erstwhile ICICI Prudential Top 100 Fund allocated…

• 95% - 100% of its assets in equity & equity related instruments.

• 0% - 5% in Debt Securities and Money Market Instruments.

From May 28, 2018, the new scheme ICICI Prudential Large & Mid Cap Fund allocates –

• 35% - 65% to equity and equity related securities of large cap companies

• 35% - 65% to equity and equity related securities of mid cap companies

• 0%-30% to equity and equity related securities other than large cap or mid cap companies

• 0%-30% to Debt and Money Market Instruments

Growth Of Rs 10,000, If Invested In ICICI Prudential Large & Mid Cap Fund Plus 5 Years Ago

ICICI Prudential Large & Mid Cap Fund: Year-on-Year Performance

ICICI Prudential Large & Mid Cap Fund: Performance Vis-à-vis Category Peers

Rolling Period Returns

Scheme Name	Corpus (Rs Cr)	1 Year (%)	2 Year (%)	3 Year (%)	5 Year (%)	Std Dev	Sharpe
Mirae Asset Emerging Bluechip	5,429	27.92	26.99	23.10	30.89	15.43	0.21
Canara Rob Emerg Equities Fund	3,530	28.72	24.24	20.52	29.53	17.29	0.17
Principal Emerging Bluechip Fund	1,838	28.35	25.85	20.15	27.78	16.48	0.17
Aditya Birla SL Equity Advantage	6,061	21.94	21.16	16.66	23.08	15.11	0.11
DSPBR Equity Opportunities Fund	5,545	21.85	21.69	16.30	20.67	14.58	0.14
Kotak Equity Opp Fund	2,500	20.47	19.42	14.60	19.35	13.38	0.11
Sundaram Large and Mid Cap Fund	378	23.72	19.46	14.42	18.04	11.89	0.17
LIC MF Large & Midcap Fund	305	24.75	22.88	14.32	0.00	14.46	0.14
IDFC Core Equity Fund	2,778	22.67	21.00	14.12	16.20	13.75	0.11
SBI Large & Midcap Fund(D)	2,271	20.68	16.78	14.00	20.31	14.16	0.09
L&T Large and Midcap Fund	1,376	25.56	19.52	13.76	19.31	13.82	0.10
Invesco India Growth Opp Fund	599	25.16	18.48	13.50	19.05	12.96	0.13
Tata Large & Mid Cap Fund	1,084	16.34	14.63	11.69	17.83	13.71	0.06
Edelweiss Large & Mid Cap Fund	284	22.12	16.06	11.62	16.83	13.00	0.10
Franklin India Equity Advantage Fund	2,835	16.76	13.63	11.04	18.66	11.45	0.05
ICICI Pru Large & Mid Cap Fund	3,120	17.15	18.42	10.80	16.79	12.53	0.07
UTI Core Equity Fund	948	19.32	15.36	10.67	15.83	13.36	0.04
Reliance Vision Fund	3,199	21.66	16.41	10.52	17.16	14.85	0.00
BOI AXA Large & Mid Cap Equity Fund	127	23.88	17.19	10.43	15.67	13.90	0.09
Nifty LargeMidcap 250 Index - TRI		25.13	21.36	15.08	19.69	14.26	0.15
NIFTY 50 - TRI		19.52	15.68	9.04	13.96	12.66	0.09

Returns are on a rolling basis and those depicted over 1-Yr are compounded annualised.
Data as on June 14, 2018
(Source: ACE MF)  

*Please note, this table only represents the best performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme related documents carefully. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.

On a rolling return basis, ICICI Prudential Large & Mid Cap Fund has done well in the longer-term periods when compared to the relevant large cap index. The performance may not be spectacular, but has been decent enough to satisfy investors. However, over the past year or so, the performance has deteriorated. This can be attributed to its shift to mid-cap stocks that have been on a gradual decline from the beginning of the year.

Being large-cap oriented the volatility is lower than that of the large-and mid-cap index and other peers in the category. Even on comparing the risk to the more appropriate large-cap index, it has been lower. The fund's risk adjusted returns have been in line with the benchmark.

The top five mutual funds with a similar investment objective and market-cap bias in the 3-year rolling period performance include—Mirae Asset Emerging Bluechip, Canara Rob Emerging Equities Fund, Principal Emerging Bluechip Fund, Aditya Birla SL Equity Advantage, and  DSP BlackRock Equity Opportunities Fund.

Investment Strategy of ICICI Prudential Large & Mid Cap Fund

ICICI Prudential Large & Mid Cap Fund will predominantly invest in equity and equity related securities of both large cap and mid cap stocks, and balance in equity and equity related securities of small cap companies and debt & money market instruments. The large and mid cap scheme will adopt the regulators definition of large caps and mid caps where, large cap companies are defined as 1st -100th company and mid cap companies are defined as 101st-250th company in terms of full market capitalization.

ICICI Prudential Large & Mid Cap Fund will focus on the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company, and the key earnings drivers.

ICICI Prudential Large & Mid Cap Fund - Portfolio Allocation and Market Capitalisation Trends

DSP BlackRock Small Cap Fund – Top Portfolio Holdings

Top 10 Stocks   Stocks % of Assets The Federal Bank Ltd. 3.96 NTPC Ltd. 3.89 Infosys Ltd. 3.86 Tata Chemicals Ltd. 3.48 ICICI Bank Ltd. 3.25 ITC Ltd. 3.16 State Bank Of India 3.14 ONGC 3.03 Tata Communications Ltd. 2.75 GAIL (India) Ltd. 2.72	Top 5 Sectors
Holdings (in %) as on May 31, 2018 (Source: ACEMF)

ICICI Prudential Large & Mid Cap Fund has a portfolio of 58 stocks. The top 10 holding currently account for 33% of the total portfolio. However, the exposure to individual stocks is reasonably diversified. For the top 10 holdings, the weightage to each stock hovers around 3%-4%. Among the top stocks on the list are The Federal Bank, NTPC and Infosys.

Among the sectoral bets, the allocation is not overly skewed to Banks and Financials, like most other funds. Banks account for 14% of the portfolio, followed by energy stocks. Consumer Non Durables and Software stocks follow closely behind with an exposure of 8% and 7.4%. Pharma stocks too, find a place among the top sectors, with an allocation of 5.8%.

Top Gainers in ICICI Prudential Large & Mid Cap Fund's portfolio

Out of the 58 stocks in the portfolio, about 23 stocks have been held for 12 months or more. About 11 of these stocks generated a return in excess of 10% over the past 1 year. Among the top stocks in the portfolio were Britannia Industries, Thomas Cook, and Infosys. These stocks rallied 68%, 34% and 26% over the past year.

No portfolio is free from laggards. Here too, among the stocks that declined the most over the past year were The Federal Bank, The Great Eastern Shipping Co., and ITC. These stocks declined 24%, 16% and 13% respectively.

Suitability of ICICI Prudential Large & Mid Cap Fund

Since the beginning of 2018, mid cap stocks have corrected significantly. The S&P BSE Mid Cap Index has fallen by 10% over the past five and half months. Against this, the large-cap index – S&P BSE Sensex is up 5%. Notably, the S&P BSE Sensex too had plunged significantly in the months of February and March 2018, but manged to recover in April 2018 and then again from the beginning of June 2018.

In such volatile markets, where uncertainty is high it is best to diversify your investments across market-caps. While you can aim for diversification through multi-cap funds, as per SEBI's new classification, you now have the option to choose dedicated Large and Mid Cap Funds that gives you the opportunity to diversify your investment across stocks of large and mid-sized companies.

Large and Mid Cap Funds operate like Multi Cap Funds, but give the fund managers a reduced flexibility. While under multi-cap funds, the fund manager can choose any exposure to large-caps, mid-caps or small-caps, for Large and Mid Cap Funds, the minimum exposure to large-caps and mid-caps is 35% each. Needless to say, the maximum exposure to each is capped at 65%.

Though in the past such a category did not exist, fund houses managed multi-cap schemes or schemes that were either predominantly large-cap or predominantly mid-cap funds. Most funds in the category will undergo a slight change in their allocation. Investors may need to wait-and-watch how such a change pans out over the next 6 months to 1 year.

Investments in Large and Mid Cap Funds will help maintain stability with an exposure to large-caps, while keeping a focus on wealth creation will a sizable exposure to mid-caps.

On a risk-reward scale, these category of funds fall between a Large Cap fund and a Mid Cap Fund. Though even Multi Cap Funds fall between large-cap funds and mid-caps funds on the risk-reward scale, as they are free to decide the market-cap allocation, the risk-reward is dependent on the investment strategy they adopt. Hence, you need to choose carefully.

ICICI Prudential Large & Mid Cap Fund is making a shift from a predominantly large-cap fund to a large and mid cap fund. This change in asset allocation strategy will have several implications on the risk-return potential of the fund. But investors can gain assurance from the skilled management at the helm. Dully consider all options before investing.

PersonalFN believes that investors must adopt a cautious approach when dealing with market volatility, and consider investing systematically when investing in Large and Mid Cap Funds.

If you plan to invest in Focused Funds or Large Cap Funds, or both, like in the case of Aditya Birla Sun Life Focused Equity Fund, do ensure that the investments are in line with your financial goals. If you are not sure about how to align these schemes with your tax planning or financial goals, do consult your financial planner or investment advisor.

Note: This write up is for information purpose and not a recommendation to buy or sell the mutual fund scheme. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor.

Editor's note: PersonalFN has a long track record of offering unbiased mutual fund research services. It analyses thousands of data points to shortlist schemes and also applies a whole host of qualitative parameters to select only a handful schemes for your portfolio.  Do try PersonalFN’s Premium Mutual Fund Research service ‘FundSelect’ Every month, our FundSelect service will provide you with an insightful and practical guidance on which mutual fund schemes to buy, hold or sell, which will assist in creating the ultimate portfolio that has the potential to beat the market. And there’s more great news! FundSelect is turning FIFTEEN. And on this auspicious 15th anniversary of FundSelect, we intend to make it “ultra-special” for you. How? Well, how about getting 1 Year of access to FundSelect virtually Free? And if you wish, perhaps even MORE... Check out the exciting offers that can be availed on subscriptions to FundSelect here. Go ahead and subscribe to PersonalFN’s FundSelect NOW!

 

---

DISCLOSURE AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014  

About the Company including business activity 

Quantum Information Services Private Limited (QIS) was incorporated on December 19, 1989. 

QIS was promoted by Mr. Ajit Dayal with an objective of providing value-based information / views on news related to equity markets, the economy in general, sector analysis, budget review and various personal products and investments options available to the Public. It was the first company to start equity research on an institutional level.

'PersonalFN' is a service brand of QIS and was started in the year 1999. In 1999, the Company registered the Domain name www.personalfn.com for providing information on mutual funds and personal financial planning, financial markets in general, etc and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services. 

Quantum Information Services Private Limited (QIS) is registered as Investment Adviser under SEBI (Investment Adviser) Regulations, 2013 and having Registration No.: INA000000680. In terms of second proviso to Regulation 3 (1) of SEBI (Research Analysts) Regulations, 2014 the Company is not required to obtain Certificate of registration from SEBI.

Disciplinary history

There are no outstanding litigations against the Company, it subsidiaries and its Directors. 

and condition on which its offer research report. For the terms and condition for research report click here.

Details of associates

1. Money Simplified Services Private Limited;
2. PersonalFN Insurance Services India Private Limited;
3. Equitymaster Agora Research Private Limited;
4. Common Sense Living Private Limited;
5. Quantum Advisors Private Limited;
6. Quantum Asset Management Company Private Limited;
7. HelpYourNGO Private Limited;
8. HelpYourNGO Foundation;
9. Natural Streets for Performing Arts Foundation;
10. Primary Real Estate Advisors Private Limited;
11. Rahul Goel;
12. I V Subramaniam.

Disclosure with regard to ownership and material conflicts of interest

1. Neither QIS, it’s Associates, Research Analyst or his/her relative have any financial interest in the subject Company , except QIS receives fees for providing research to Quantum Equity Fund of Fund (QEFoF) which is Fund of Fund scheme managed by QMF.
2. Neither QIS, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report.
3. Neither QIS, it's Associates, Research Analyst or his/her relative has any other material conflict of interest at the time of publication of the research report except that QIS (PersonalFN) is, as per SEBI (Mutual Funds) Regulations 1996, an associate / group Company of Quantum Asset Management Company Private Limited and Trustees and Sponsor of Quantum Mutual Fund (QMF) and to that extent there may be conflict of interest while recommending any schemes of QMF. However any such recommendation or reference made is based on the standard evaluation and selection process, which applies uniformly for all Mutual Fund Schemes. The payment of commission (upfront /annualized & trail), if any, for any Schemes by QMF to QIS (PersonalFN) is also at arm's length and as per prevailing market practices

Disclosure with regard to receipt of Compensation
 

1. Neither QIS nor it's Associates have any compensation from the subject Company in the past twelve months.
2. Neither QIS nor it's Associates have managed or co-managed public offering of securities for the subject Company in the past twelve months.
3. Neither QIS nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject Company in the past twelve months.
4. Neither QIS nor it’s Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months except from Axis Bank Limited under a service agreement.
5. Neither QIS nor it's Associates have received any compensation or other benefits from the subject Company or third party in connection with the research report

General disclosure
 

1. The Research Analyst has not served as an officer, director or employee of the subject Company.
2. QIS or the Research Analyst has not been engaged in market making activity for the subject Company.

Subject Company means Mutual Fund Schemes

Quantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021 Corp. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021. Email: info@personalfn.com Website: www.personalfn.com Tel.: 022 61361200 Fax.: 022 61361222

SEBI-registered Investment Adviser. Registration No. INA000000680, SEBI (Investment Advisers) Regulation, 2013

Add Comments