ICICI Flexi Cap Fund is an open-ended equity mutual fund scheme offered by ICICI Prudential Mutual Fund. The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related instruments across all market capitalizations including large, mid, and small-cap.
The fund has a diversified portfolio across various sectors like financials, IT, FMCG, etc. The top holdings of this fund include Reliance Industries, HDFC Bank, Infosys, and ICICI Bank. This type of Flexi Cap fund follows a mixture of growth and value investing styles. It identifies companies with strong competitive positions, high-quality management, and growth potential. The benchmark for evaluating the fund's performance is the Nifty 500 Total Return Index.
Understanding ICICI Flexi Cap Fund
ICICI Flexi Cap Fund was launched in October 2013 and is managed by ICICI Prudential Asset Management Company.
ICICI Prudential AMC has over 25 years of experience in the Indian capital markets. It has a presence across equities, fixed-income, gold funds, and solutions-oriented schemes. As of September 2023, it manages assets of over Rs. 3.7 lakh crores across its various mutual fund schemes.
The objective of the Fund is to invest in a single diversified portfolio of large, mid, and small-cap stocks. This flexi cap fund offers the flexibility to shift allocation based on market opportunities. It's managed by Mr. Dharmesh Kakkad, a renowned portfolio manager for the last 17 years. Under his oversight, the fund has delivered steady long-term returns for investors. ICICI Flexi Cap fund direct and regular growth plans are also offered.
Investment Philosophy of ICICI Flexi Cap Fund
The investment philosophy of ICICI prudential Flexi Cap Fund is:
- A blend of Growth and Value Investing: The fund follows a unique approach of identifying growth companies (with the potential to deliver earnings growth consistently) and value companies (trading at discounts to their natural value).
- Focus on Quality: It emphasizes investing in companies with good financial performance, strong competitive advantages, experienced and capable management, robust business models, and good corporate governance.
- Long-Term Outlook: The fund adopts a long-term investment perspective of 3-5 years while selecting stocks. It focuses on companies' long-term growth potential and fundamentals rather than short-term market trends.
- Flexi Cap Approach: ICICI Prudential Flexi Cap fund has the flexibility to dynamically allocate its investments between large, mid, and small-cap stocks depending on market opportunities. The fund can shift allocation between 65-35% in large, mid, and small-cap stocks.
- Bottom-Up Stock Selection: The fund relies on an in-depth analysis of individual companies and sectors. Investment decisions are based on thorough research and evaluation of the business and financial parameters of potential investment candidates.
Latest Asset & Portfolio Allocation
As of October 31, 2023, the ICICI Flexi Cap Fund shows the following asset and portfolio allocations:
- Equity Allocation: The fund's portfolio primarily consists of equities making up 96.68% of total assets.
- Debt Allocation: About 0.91% of the portfolio is invested in debt instruments.
- Other Allocations: The fund has a 2.41% allocation to other assets.
Top Stock Holdings
| Stock | Ticker | Last Price | Technical Score | Growth Score |
|---|---|---|---|---|
|
Avenue Supermarts Limited
|
DMART
|
3532.95
|
44
|
73
|
|
HDFC Bank Limited
|
HDFCBANK
|
1629.6
|
38
|
63
|
|
ICICI Bank Limited
|
ICICIBANK
|
1229.8
|
57
|
83
|
|
TVS Motor Company Limited
|
TVSMOTOR
|
2231.7
|
43
|
83
|
- TVS Motor Co. Ltd. (9.83%): TVS Motor Co. Ltd. is a known player in the automobile industry. It holds a significant position in the fund's top stock holdings.
- ICICI Bank Ltd. (7.14%): ICICI Bank Ltd. is a leading financial institution and is among the top holdings. ICICI Bank contributes to the fund's equity portfolio.
- HDFC Bank Ltd. (5.7%): HDFC Bank Ltd. is another major financial sector player. It is part of the fund's top stock holdings.
- Avenue Supermarts Ltd. (5.17%): Avenue Supermarts Ltd. is a notable player in the retail sector. It holds a substantial position in the fund.
Allocation by Market Cap
- Large Cap (78.37%): Most fund investments are in large-cap stocks. It reflects a focus on well-established companies.
- Mid Cap (9.41%): A portion of the portfolio is allocated to mid-cap stocks. This portion provides a balance between potential growth and stability.
- Small Cap (8.91%): The fund also holds positions in small-cap stocks which contributes to diversification and exposure to emerging companies.
Allocation by Sector
- Automobile (23.72%): The fund has significant exposure to the automobile sector with investments in companies like TVS Motor Co. Ltd.
- Financial (20.8%): The financial sector represented by companies such as ICICI Bank Ltd. and HDFC Bank Ltd. holds a substantial share in the portfolio.
- Services (13.04%): The services sector including companies like Avenue Supermarts Ltd. is another key component of the fund's allocation.
- Technology (6.87%): The Indian technology sector consists of innovative companies. It also contributes to the fund's diversification.
Performance Analysis of the Fund
Here is the performance analysis:
- Since Inception (October 2013): ICICI Flexi Cap Fund NAV is 14.5% since inception as compared to 12.5% returns generated by its benchmark Nifty 500 TRI.
- 1-Year Performance: Over the last 1 year, the fund has underperformed its benchmark and given a negative return of -5.4% due to the market volatility.
- 3-Year Performance: It has outperformed its benchmark over the last 3 years by delivering annualized returns of 11.5% as compared to the 10.5% returns of Nifty 500 TRI.
- 5-Year Performance: The fund has outperformed its benchmark with annualized returns of 14.5% over 5 years vs 13.5%.
- 10-Year Performance: Since its 10-year track record, the fund has consistently beaten its benchmark by generating annualized returns of 14.5% vs 13% of Nifty 500 TRI.
The fund has consistently outperformed its benchmark index over longer periods of 5, 7, and 10 years.
Comparison with Other Flexi Cap Funds
As of December 1, 2023, the ICICI Flexi Cap Fund demonstrates its performance in comparison with other flexi cap funds:
- Average Performance: The average annual return for flexi cap funds is recorded at 16.92%. This indicates the collective performance of funds in this category.
- Highest Performer: The Quant Flexi Cap Fund stands out as the highest performer with an impressive annual return of 25.48%.
Annual Returns of Other Flexi Cap Funds
- Quant Flexi Cap Fund (25.48%): Quant Flexi Cap Fund is leading the pack. It has delivered the highest annual return.
- Parag Parikh Flexi Cap Fund (22.59%): The Parag Parikh Flexi Cap Fund has demonstrated a robust performance. It has positioned itself among the top performers.
- JM Flexicap Fund (20.6%): This fund has achieved a commendable annual return of 20.6%.
- PGIM India Flexi Cap Fund (20.01%): PGIM India Flexi Cap fund has delivered substantial returns.
- HDFC Flexi Cap Fund (18.39%): The HDFC Flexi Cap Fund has also demonstrated consistent performance within the flexi cap category.
- DSP Flexi Cap Fund (18.17%): DSP Flexi Cap fund has delivered a respectable annual return of 18.17%.
Final Words
ICICI Flexi Cap Fund by ICICI Prudential Mutual Fund has proven to be a well-managed and consistently performing investment option. The fund's flexible approach to market opportunities emphasizes a mixture of growth and value investing. It has resulted in consistent and solid returns across various time frames. However, it experienced a brief decline in the past year but this mutual fund has consistently outperformed the benchmark in the long run. This makes it an excellent choice for investors who are looking for a diverse and effective investment option.