Which is a better fund-Prudential ICICI Growth Plan or Prudential ICICI Power?
S.N. Nair, via e-mail
If one considers their three-year performance, both Prudential ICICI Growth Plan and Prudential ICICI Power stand neck-to-neck with a return of 12.04 per cent and 10.02 per cent respectively. On the other hand Prudential ICICI Power towers over Prudential ICICI Growth Plan for year-to-date through October 21 2002. Both have decently outperformed their benchmark indices. But returns should not be the only criteria for choosing a fund.
Prudential ICICI Power started out as a closed-end fund in September 1994. It was converted into an open-end fund in October 2001. The fund invests in the core sectors of the economy such as energy, telecommunications, construction, transportation, financial services and software. Industries, which support these core sectors-oil & gas, cement, cables etc are also included in the funds investment universe.
This orientation has often seen the fund getting concentrated in few sectors. Currently its fate is linked to few sectors like - automobiles, technology and diversified.
In comparison Prudential ICICI Growth, is diversified across sectors. It strives to benchmark its portfolio to the S&P CNX Nifty. The scheme does not have any specific theme, which restricts its investment universe. A result of this diversification is that the fund also has investments in defensive sectors such as pharma and FMCG. This should bring greater stability to the funds NAV.
The bottomline - belonging to the same fund house, both these funds are positioned differently. A true comparison is difficult because both schemes do not have the same investment objectives. It's a bit like comparing green apples with red apples. Each has its pluses and minuses, but at the end of the day they are different.
So it all depends on what you want. A truly diversified fund like Prudential ICICI Growth Plan or a diversified fund with a specific theme, like Prudential ICICI Power.
This article was originally published on January 07, 2003.
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