VR Logo

Should I exit ICICI Prudential Value Discovery Fund?

"The fund has a high-quality portfolio and the fund manager has a distinctive thought process," says Dhirendra Kumar

ICICI Prudential Value Discovery Fund is a multicap fund rated 5 star on your Value Research site. But if you look at one year return on Value Research it is 13%, 2 years (7.6%) and 3 years (14.7%). It clearly shows that it is unable to beat its benchmark for close to 3 years. So why is it still rated 5 star on Value Research? I'm saying this because I have an ongoing SIP for the last seven years and I have made reasonable gains on it. I'm thinking of stopping my SIP and starting a new SIP in an aggressive multi-cap fund. Kindly suggest me a few good aggressive multi-cap funds.
- Abhishek, Noida

Transcript: ICICI Pru Value Discovery Fund is an outstanding fund with a compelling history. However, unfortunately, it suffers from what is called the 'winners curse' meaning that good performance causes the fund size to grow dramatically larger, in turn affecting returns. 1.5-2 years ago it moved from our mid and small cap category to the multicap category. It is on its way to the large cap category. However, the fund is true to its value orientation even now. The fund has a high-quality portfolio and the fund manager has a distinctive thought process. This causes it to under-perform in a roaring market and do well when the market struggles. Our ratings are guided by three year risk-adjusted returns. If you are investing on the basis of one-year returns you will always be playing catchup. I would say, don't look at the short-term performance.

P.S. This question was asked on 25.06.2017, when the fund was rated 5 stars.

Post Your Query