The stellar performance of large-sized companies in the June 2018 quarter indicates that the big boys are better placed than mid-sized ones in recording consistent growth in their revenues. This warrants enhancing investment exposure to large-sized companies due to their better balance sheet, superior return ratios and dominant market share in their respective sectors.
Among mutual fund schemes that have singular focus on large-sized companies, ICICI Pru Bluechip has distinguished itself by consistently beating its benchmark and peers by a reasonably good margin. Another factor that works in favour of the scheme is the presence of ace fund manager S Naren, who has a strong record of being at the helm of well-performing schemes. He is known to be one of the few fund managers who have been conscious of investing in companies which may be out of favour, but hold promise of visibility of earnings in the long term.
In the past three- and five-year periods, the scheme has delivered 13 per cent and 18 per cent returns, while its benchmark, Nifty50 TRI, has given 12 per cent and 16 per cent returns in the same period, respectively. This scheme has beaten both the category and benchmark in eight of the nine years since launch.
In the past six months, the scheme’s fund managers — S Naren and Rajat Chandak — have bought in companies which fall under the value theme. A few prominent companies the scheme has bought in are Bank of Baroda, NHPC, Coal India and Mahindra & Mahindra.
Large companies should form the core of an investor’s equity portfolio. This scheme is one of the most consistent performers in its category. It follows a benchmark hugging investment strategy. However, to generate alpha, the sector weightage varies. It is either 5 per cent more or 5 per cent less than its benchmark index. Investors looking to invest in an ‘all-weather’ and ‘trueto-its-label’ large cap portfolio can consider investing in this scheme.
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