Herd Instinct: ICICI Pru Focused Blue Chip vs. ICICI Pru Top 100

Published: October 8, 2014 at 7:00 am

Last Updated on September 4, 2018 at 10:19 am

In this post, let us compare two large cap funds from the  same fund house. One a consistent performer with a terrific track record and the other a young superstar. The results will hopefully show how herd instincts among investors (and perhaps amcs  and therefore(?) intermediaries too?) can obscure good funds from the same fund house.

The results shown below are derived with:

Let us now list the salient features of both funds (Sources: VR online, thefundoo, fund SIDs, monthly reports)

ICICI Pru Focused Blue Chip Equity

Category: Large Cap

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

Benchmark: CNX Nifty

Inception Date: 23rd May 2008

AUM: 5879.7 Crores  (30th June 2014)

Investment Objective: To generate long-term capital appreciation and  income distribution to unit holders from a  portfolio that is invested in equity and equity  related securities of about 20 companies  belonging to the large cap domain and the  balance in debt securities and money market  instruments. The Fund Manager will always  select stocks for investment from among top 200 stocks in terms of market capitalization on  the National Stock Exchange of India Ltd.

If the total assets under management under this  scheme goes above Rs. 1,000 crores the Fund  Manager reserves the right to increase the  number of companies to more than 20.

Indicative asset allocation: 

Equity: 70% or more. Rest in debt or money market instruments


Large cap: 88.5%

Mid-cap: 8.9%

Small-cap: 0.6%

Cash: 2%

Dominant Sectors:

Finance: 33.47%

Energy: 12.99%

IT: 13.79%

FMCG: 14.9%

ICICI Pru Top 100

Category: Large Cap

Benchmark: CNX Nifty

Inception Date: 9th July 1998

AUM: 666.56 Crores  (30th June 2014)

Investment Objective: To generate long-term capital appreciation  from a portfolio that is invested  predominantly in equity and equity related securities

(broader the mandate, the less verbose the objective!)

Indicative asset allocation: 

Equity: 95% or more.  Rest in debt or money market instruments


Large cap: 79%

Mid-cap: 12.3%

Small-cap: 3.3%

Cash: 5.4%

Dominant Sectors:

Finance: 27.6%

Energy: 25.6%

IT: 15%

Portfolio overlap: Out of the 80% folio listed at VR online, there is an overlap of 52%. Which is significant.

Obtained with: Mutual Fund Portfolio Comparison Tool

Impression: There is reasonable similarity between the two funds (at the moment!). ICICI Top 100 is a bit more diversified than Focused Blue Chip equity.

ICICI Pru Focused Blue Chip Equity vs. Nifty



The data and graph speak for themselves. Needless to say that the fund has done excellently well when compared with the Nifty

Ulcer index is a measure of downside protection and investor stress.



Since Focused Blue Chips ulcer index is lower than that of Nifty, investors would have been sitting pretty with this fund.

Created with Mutal Fund Risk and Return Analyzer

Read more: Mutual Fund analysis with the Ulcer index

ICICI Pru Top 100  vs. Nifty



Top 100 has a longer history of consistent outperformance.



Again pretty decent when compared with the Nifty. However, not as much as Focused Blue Chip.

Created with Mutal Fund Risk and Return Analyzer

ICICI Pru Focused Blue Chip Equity vs. ICICI Pru Top 100



This Ulcer index comparison confirms that Focused Bluechip has better downside risk than Top 100. However,



A score of more than 50% means focused blue chip has done better than top 100. Created with  Fund A vs. Fund B Risk and Return Analyzer

While there is not much difference in terms of returns, Top 100 has  had better overall risk-adjusted performance than focussed blue chip for the last four years.

Is this because  of its large AUM? 

In Aug. 2009, Focused Blue Chip had 20 stocks in its folio (as per its original mandate) with an AUM of ~ 740 Crores and an annual churn ratio of 1.18 times.

In Aug. 2014, it has 50 stocks. It has to, because its AUM is now ~ 5879 Crores. Its churn ratio has dropped to 0.57 times.  Read more about the impact of size on churn ratio here:  Mutual Fund Size vs.  Performance: a case study

My answer would be, yes.

ICICI Top 100 has a current AUM of ~ 666 Crores.  Lower than what focused blue chip had 5 years ago?

The reason I wrote up this analysis is to pose the question why is this so?

In terms of performance, that is bare returns, there is not much difference between the two funds.  In fact, Top 100 has a longer track record of consistency.

So why has this been pushed to the background?  Who is responsible for this?

The AMC? The distributors? The investors?  My guess is everyone.

The only difference between the two funds:

Focused blue chip began operations at the start of the 2008 financial crisis.  Therefore, I think  it appeared as a saviour to many  since the established funds  (incl. top 100) were struggling to cope with the crash.

While existing mutual fund investors flocked to focused blue chip equity, new investors saw it as a safe bet. One person said, ‘the fund would never fail’.

It is heartening that MorningStar analysts have given a ‘silver’ rating  to Top 100 and a  ‘neutral’ rating to focused blue chip, while VR online rates them both as 5* funds.

Silver: Fund with advantages that outweigh the disadvantages across the five pillars and with sufficient level of analyst conviction to warrant a positive rating.

Neutral: Fund that isn’t likely to deliver standout returns but also isn’t likely to significantly underperform, according to the analysts.

Now a few definitions for your perusal. Hopefully, they would clarify the first word in the title of the post.

Herd Behaviour

A group of animals fleeing from a predator shows the nature of herd behavior. In 1971, in the oft cited article “Geometry For The Selfish Herd,” evolutionary biologist W. D. Hamilton asserted that each individual group member reduces the danger to itself by moving as close as possible to the center of the fleeing group. Thus the herd appears as a unit in moving together, but its function emerges from the uncoordinated behavior of self-serving individuals.   (wikipedia)

Herd Instinct

A mentality characterized by a lack of individual decision-making or thoughtfulness, causing people to think and act in the same way as the majority of those around them. In finance, a herd instinct would relate to instances in which individuals gravitate to the same or similar investments, based almost solely on the fact that many others are investing in those stocks. The fear of regret of missing out on a good investment is often a driving force behind herd instinct. (investopedia)

Information cascade

This occurs when a person observes the actions of others and then—despite possible contradictions in his/her own private information signals—engages in the same acts. A cascade develops, then, when people “abandon their own information in favor of inferences based on earlier people’s actions” (wikipedia).

Moral of the story:  Never buy a fund because it is popular or even if a professional recommends it.  Focus on your own portfolio. Do your own research. Ignore star ratings.

Note:  Do not sell or stop investing in focused blue chip because of this post. Evaluate  your needs and make informed choices.  You know where to find the  necessary tools 😉


Many years ago, my wife and I took an evening stroll around a temple tank. The moon was full and beautiful. We stopped to stare at it for a few minutes and took some pictures.  Before we stopped to look at the moon, no one around us cared about it in the busy street. When they saw two people looking at something, they became curious and joined in. Soon there was a chain reaction! I am pretty sure behavioral scientists have a word for this phenomenon.  Do share, if you know what it is.

Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.
🔥Now Watch Let's Get Rich With Pattu தமிழில் (in Tamil)! 🔥
  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter using the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl-version covers of "Chinchu Gets a superpower".
Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)