Are you afraid to invest money directly in stocks considering the ups and downs of the stock market? If yes, then the path of mutual fund will be right for you. Equity schemes of mutual funds invest money in shares.
The difference is that the fund manager decides the choice of stocks to invest in and how much money to invest in them. The fund manager has the expertise to do this job. He takes decisions after many studies and research.
There are also different types of equity funds. Such as largecap, smallcap, midcap, multicap etc. Today we are telling you about ICICI Pru Bluechip Fund (IPBF). IPBF is a large fund. It has invested 93.34 per cent of its portfolio in stocks of domestic companies.
Largecap stocks account for 77.65 per cent in its portfolio. It has invested 6.53 per cent in midcaps and 0.36 per cent in smallcaps. Its exposure to debt is only 0.33 per cent. For large cap funds, it is necessary to invest a major part of their portfolio in large cap stocks. Largecap companies mean the top 100 companies listed on the stock exchange on the basis of market capitalization.
IPBF’s record in terms of returns has been excellent. Its annual return in 10 years has been 15.09 per cent. In comparison, the average return of the largecap category has been 13.71 per cent during this period. In this way, if you had invested one lakh rupees in lumpsum in this fund in July 2012, then today your money would have become 4 lakh rupees. An annual return of more than 15 per cent in 10 years can be considered attractive for a fund.
Its annual return in 5 years has been 11.64 per cent. This fund was started on May 23, 2008. The expense ratio of this fund is 1.71 per cent. Its benchmark is NIFTY 100 TRI. You can start SIP in this fund with just Rs 100. It is an open ended fund. This means that you can invest in this fund anytime. You can withdraw your money whenever needed.
But, generally long-term investments in equity funds are beneficial. You can expect a good return on investment in it for at least 5 years. Since, large cap funds tend to invest more in large companies, they are relatively less affected by market volatility.
IPBF has invested in shares of a total of 74 companies. Its portfolio includes ICICI Bank (9.94%), Infosys (8.20%), HDFC Bank (8.18%), Reliance Industries (7.22%), Larsen and Toubro (5.50%), Bharti Airtel (5.48%) and Axis Bank (4.86%).
This scheme of ICICI Prudential Mutual Fund has a good track record so far. However, past track record cannot be taken as a guarantee of future returns. Since, it is an equity fund, there is risk associated with it. The volatility in the stock market will affect the performance of the scheme. Therefore, you should decide to invest in this fund only after seeing your risk appetite.