ICICI Bluechip Fund SIP Performance Review: Time to exit?

Published: June 29, 2020 at 11:34 am

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We review the SIP performance of ICICI Bluechip Fund for various durations comparing it with NIfty 50 TRI and Nifty 100 TRI. Older mutual fund investors would appreciate how ICICI Bluechip Fun quickly became popular as the world emerged from the 2008 financial crisis. How things have changed!

Launched in May 2008 right in the middle of the 2008 crash, the fund impressed with an excellent outperformance for the first few years that diminished significantly before Feb 2018 and non-existent after that. In Dec 2018 we had reported that the fund was among only five Large Cap funds have comfortably beat Nifty 100.

The fund’s initial scheme mandate and subsequent changes and possibly AUM growth played a role in its performance. Launched as ICICI Prudential Focused Equity Fund – an open-ended diversified equity scheme that in invest in 20 or less large cap stocks.

In early 2010 it was renamed as ICICI Prudential Focused Bluechip Equity Fund. As on Aug 31st 2010 its AUM was only 1451 Crores! By Jan 2013, the AUM had more than tripled. By April 2017 the AUM had tripled again to 13,000 plus crores. Since then the inflow has reduced a bit perhaps due to other choices for new investors  (midcap and smallcap funds). The current AUM is still an impressive 21,765 Crores – the highest for an active large cap fund.

When it started out, it had a 20 stock mandate with a clause that the number of stocks could increase when the AUM grew higher than 1000 crore. The fund kept the portfolio down to 20 stocks until Dec. 2011 at about 3532 Cr AUM levels.

The number of stocks kept moving up. By Dec 2012, it was “25-30 stocks” increasing to 37 in Dec 2013 including 0.38% exposure to ICICI Prudential CNX 100 ETF! The current number of stocks is a stately 64! Also the word “focused” was dropped from its name only much later in early 2018 to comply with SEBI norms. The asset allocation history is shown below.

Asset allocation history of ICICI Bluechip Fund
Asset allocation history of ICICI Bluechip Fund

Older investors who started with a focused fund with less than a third of the current portfolio strength would have visibly felt the drop in performance.  Trailing returns (lump sum) are shown below. Returns lower than the benchmark are indicated in red.

DurationICICI Pru Bluechip Fund(G)ICICI Pru Bluechip Fund(G)-Direct PlanNIFTY 100 – TRI
1 Year-11.3-10.7-10.3
2 Years-1.8-1.1-1.0
3 Years2.43.33.7
4 Years7.88.98.9
5 Years6.37.56.7
6 Years9.110.58.9
7 Years16.818.815.3
8 Years17.716.6
9 Years14.813.1
10 Years16.412.9
12 Years25.416.8
11 Years22.816.9

SIP Performance of ICICI Bluechip Fund

The regular plan has underperformed for more periods than the direct plan because of the commissions. Yet another piece of proof to pull out from at least regular plans!

DurationICICI Pru Bluechip Fund(G)-Direct PlanICICI Pru Bluechip Fund(G)NIFTY 100 – TRINIFTY 50 – TRI
1Y-6.9-7.5-6.4-7.4
2Y-4.3-5.0-4.0-4.3
3Y-1.9-2.7-1.3-1.0
4Y1.60.82.22.5
5Y4.23.34.44.5
6Y5.04.14.94.8
7Y7.26.26.66.3
8Y7.67.77.3
9Y8.58.48.0
10Y8.88.48.0
11Y9.38.68.1
12Y10.79.69.0

Time to exit? Sadly, those are not good looking numbers. Lump sum or SIP, the underperformance is similar. Yet another reason why you should switch to a simple Nifty index fund especially if your exposure is not too high.

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