This fund chews on financially healthy entities, with a one-point agenda: look at companies that offer low-risk and high returns in the long run. With long-term capital appreciation as its target, the fund's returns are stellar: its trailing 5-year return is 27.06% while the 3-year return is 17.06%.
Launched in 1993 as a closed-end fund, its initial gains from IPOs were reduced practically to zilch when it came for redemption in 1998. However, after initial drubbing, the fund looks quite perky today. This new look was a result of its turning open-end in 1998. Ever since, the fund has made up for lost ground by performing well in a bearish market and by consistently delivering good returns.
Since 1997, the fund in a bid to build on its tiny asset base has focused on market leaders across sectors. It has adopted a strategy of riding the line between value and growth. Currently, technology, financial services and energy account for nearly 50% of its portfolio. This year, the former two and basic engineering stocks have accounted for a sizeable portion of Pioneer ITI Bluechip's portfolio, even higher than the benchmark Sensex. Although the fund continues to be bullish on ITC, exposure to FMCG sector has been pruned substantially. As for technology, the fund in the light of attractive valuations today has picked second-rung IT stocks. Recent strategic moves are a clear deviation from its investment strategy of sticking only to bluechips.
Overall, the fund is fully invested now. However, its short-term returns aren't pretty, worse than even the peers' – the fund's trailing 3-month loss of 5.07% trails behind category's gain 0.25%. Gauging Pioneer ITI Bluechip on its recent performance wouldn't be fair considering its 5- and 3-year return beat category average and the Sensex by a huge margin. The fund's active management, with portfolio diversification, has ensured good returns with low swings, and hedging against downside risks vis-à-vis peers and broad markets.
For investors with a long-term perspective who prize low volatility, high liquidity with good returns, Pioneer ITI Bluechip might be worth a dekko.