• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Suresh Krishnamurthy

INVESTORS in PruICICI Growth Plan can consider cutting their exposures to the fund. The fund performance over the past one, three and five years has not been impressive, under performing its peers by a sizeable margin. There are other plans with better record such as PruICICI Power to which investors can shift their holdings.

Investors should, however, shift only a part of their holdings to Power, as it sports a slightly higher risk profile than a typical diversified equity fund. The rest should be put in a large-cap diversified fund such as HDFC Top 200, Sundaram Growth and UTI Mastergrowth.

Performance: Over the past year, PruICICI Growth Plan has registered returns of about 14 per cent. In terms of rankings, the fund would fall in middle of the list. There is nothing wrong in this. If the fund performance consistently falls in the middle of the list, the performance would add up over the years, building wealth for its unit-holders. This, however, is not the case with PruICICI Growth Plan. There is a distinct tendency to lag behind its peers.

For instance, over a three-year period, the fund lags behind some schemes such as Sundaram Growth and UTI Mastergrowth by as much as 10 percentage points per annum. Incidentally, the performance of Sundaram Growth and UTI Mastergrowth themselves fall in the middle of the pack consistently and their long-term record is still impressive. Over a five-year period too, the performance is unimpressive. Even if this differential of 10 percentage points per annum narrows to about 5 percentage points, going forward, the opportunity loss for investors would be considerable.

It has to be said, however, that on 1-year, 3-year and 5-year returns, the fund has outperformed S&P CNX Nifty. Funds such as PruICICI Power, however, outperformed by an even greater margin.

Portfolio allocation: At the end of March 2005, the fund was almost fully invested. It had about 30 stocks in its portfolio, which wore a concentrated look. The top ten stocks accounted for nearly 60 per cent of net assets. At a time when the number of stocks available for investment has gone up sharply, the high level of concentration stands out. In terms of industries, too, the concentration levels appeared high.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Investment quiz

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line