MF Tracker: Can this mega largecap fund add stability to your portfolio in volatile market?

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Experts take on performance
With the market being volatile and experts are recommending large cap funds for investment of which one fund is ICICI Prudential Bluechip Fund . The fund is the largest fund in the category and had an AUM of Rs 68,033 crore as on April 30, 2025.Launched on May 23, 2008, the large cap fund is given five star rating by ValueResearch and Morningstar.Based on trailing returns, the scheme has outperformed its benchmark and category average in the last six months, nine months, one-,three-,five years. On the other hand, it has outperformed against its benchmark and underperformed the category average in the last three months.The large cap fund offered 0.66% return in the last nine months against a loss of 1.61% by the benchmark (NIFTY 100 - TRI) and a loss of 2.02% as the category average. In the last one year, it offered 10.38% against 8.51% by the benchmark and 8.04% as the category average.In the last three years, the scheme gave 20.74% compared to 16.53% by the benchmark and 17.25% as the category average. The scheme in the last five years offered 26.07% against 23.56% by the benchmark and 22.40% as the category average.On the basis of daily rolling return in the last five years, the scheme has offered 14.55% return and based on the same parameter, in the last three years, the scheme gave 19.47% return.'The success of ICICI Prudential Bluechip Fund can be attributed to the disciplined approach we follow in portfolio construction. Our primary focus is on avoiding significant mistakes—specifically, steering clear of stocks that could land in the bottom third of the performance curve,' commented Anish Tawakley , Co-Chief Investment Officer – Equity, ICICI Prudential AMC'We adopt a barbell strategy for stock selection. On one end, we invest in value opportunities—companies that may be under near-term pressure but offer meaningful potential for mean reversion. On the other end, we back businesses with strong growth prospects and robust fundamentals. This balanced approach helps us build a resilient portfolio that can deliver consistent, long-term performance across market cycles,' he added,An expert believes that since its inception in 1993, ICICI Prudential Bluechip Fund has had a track record of strong performance and being an actively managed large-cap category fund, it has a higher expense ratio.'The fund has generally outpaced the benchmark, which is BSE 100 TRI. The 3-month returns have been slightly below par; however, such short-term aberrations are normal in actively managed funds. The fund demonstrates resilience and consistency over the long term, reflecting the manager's disciplined approach and stock picking skills,' said Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial RadianceLooking at the yearly returns for the last 10 years, the scheme has offered negative returns in 2015 and 2018 of around 0.21% and 0.81% respectively. Across the 10 calendar years, the fund gave the highest returns in 2017 of around 32.75%.If an investor invested Rs 10,000 via monthly SIP in the scheme since its inception, the current value would have been Rs 89.25 lakh with an XIRR of 15.69%. In the last five years, the value of the same monthly SIP would have been Rs 9.66 lakh with an XIRR of 19.36%.In the last three years, the value of the same monthly SIP would have been Rs 4.73 lakh with an XIRR of 19.01%.If an investor made a lumpsum investment of Rs 1 lakh in the fund at the time of its inception, the current value would have been Rs 10.81 lakh with a CAGR of 15.03%. The value of the same investment in the last five years would have been Rs 3.16 lakh with a CAGR of 25.89%. In the last three years, the value of the same investment would have been Rs 1.76 lakh with a CAGR of 20.76%.The large cap fund had 90.66% in equity, 1.60% in debt, and 7.74% in others as on April 30, 2025. In comparison to the large cap category, the scheme is overweight on debt and others whereas underweight on equity. The category on an average had 94.10% in equity, 0.73% in debt, and 5.16% in others.Being a large cap fund, the scheme invests 84.33% in large caps, 5.86% in mid caps, 9.66% in others and 0.15% in small caps.Post the allocation by the fund and being the large cap fund, Minocha advices that investors looking for active management in the large caps and who can endure some volatility, as compared to passive variants like a Nifty 50 index fund, can choose this fund and in today's market situation with high valuations across the board, there may be value in looking for more flexible options toward risk-adjusted returns.He adds that investors who have a horizon of five years or more may want to look at flexi-cap or large & mid-cap funds, where fund managers consider their allocation into different market caps depending on the valuation comfort. That being said, ICICI Pru Bluechip can still be considered for some exposure exclusive in the large-cap category.The PE and PBV ratio of the small cap fund were recorded at 31.81 times and 5.96 times respectively whereas the dividend yield ratio was recorded at 4.89 times as of April 2025.The fund had the highest allocation in the bank sector of around 24.07% compared to 26.45% by the category. The scheme is overweight on automobile & ancillaries, crude oil, infrastructure, construction materials, telecom, insurance, and power.The top 10 stocks of the fund constitute 54.39% of the total portfolio as on April 2025. Based on the last three years, the scheme has offered a Treynor ratio of 1.44 and an alpha of 0.42. The sortino ratio of the scheme was recorded at 0.81. The return due to net selectivity was recorded at 0.41 and return due to improper diversification was recorded at 0.02 in the last three years.The investment style of the fund is to invest in growth oriented stocks in large cap market capitalisation.Apart from ICICI Prudential Bluechip Fund, there are 27 funds in the category who have a track record of three years. Nippon India Large Cap Fund gave the highest return of 22.90% in the last three years, followed by DSP Large Cap Fund which gave 21.54% return in the same period.Axis Bluechip Fund gave the lowest return of around 13.83% in the last three years in the large cap category.Looking at the performance of the large cap funds, Minocha mentioned that when markets are volatile, there is a tendency to lean towards safety in large caps and the bigger upside offered by mid and small caps during a rally, however, can be offset by the fact that large caps tend to offer better downside protection and quicker recoveries during market corrections.'Investors with the temperament for low volatility and predictable returns are best placed with a stake in large-cap funds, which have given returns over inflation over time. Hence, a balanced investment approach combining the relative safety of large caps with selective exposure to the mid/small-cap funds can prove to be a reward in terms of returns for taking on risk,' he adds.One should always choose a scheme based on risk appetite, investment horizon, and goals.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.

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