• Hercules

ICICI Value Discovery Fund-Will the underperformance turn?

Over the last 1-3-5 years this fund has under-performed the index.

So let us try analyse the portfolio of this mutual fund.

Based on our analysis of the stocks which includes last 5 year returns and future prospects we try to analyse the portfolio of this MF to see the future prospects

Points to note

  1. Sun Pharma and NTPC remain the top pick with 8.03% and 6.81% of the assets respectively.Sun pharma has been mired in controversy over the past 1 year and has a difficult road ahead.NTPC on the other hand a power company is griped with problems of its own and has never made money over the last 10 years.

  2. Some other dud stocks include indian Oil corporation,Bharti Airtel and Vedanta.

  3. To our utter surprise the fund held Vodafone Idea which has been a terrible value destructor.

  4. The fund also has a sizeable chunk invested in Nifty-50 ETF. An active fund investing in a passive fund.

  5. On the other hand there are good investments like Infosys,TCS PI Industries etc.

  6. On the whole on careful Analysis we found that out of 90% equity holdings nearly 30-35% assets of the MF were invested in companies which have severe problems like Bharti Airtel,NTPC,Tata Motors Sun Pharma etc.

  7. Only 20-25% of the assets are invested in super high quality companies like HDFC Bank etc.

Therefore to conclude the fund is invested some undesirable companies which could lead to under-performance in the near term.

Disclaimer:-The author of this report is a Chartered Financial Analyst(CFA) from CFA Institute,USA,the views expressed in the above report are personal and at no point should be construed as an investment advise.Please consult your financial advisor before making any decisions.Reproduction of the above report is strictly prohibited.