Should you hold on to ICICI Prudential Bluechip Fund?

ICICI Prudential AMC has decided to change fundamental attributes of ICICI Prudential Focused Bluechip Equity Fund to comply with Sebi’s re-categorisation norms for mutual funds. The scheme will be renamed as ICICI Prudential Bluechip Fund. The change will be effective from May 28.

The scheme has been categorised as an open-ended equity scheme, predominantly investing in largecap stocks. In its earlier avatar, the scheme was supposed to invest in equity and equity-related securities of about 20 companies, belonging to the largecap domain and the balance in debt securities and money market instruments.

The scheme will now invest a minimum 80 per cent of the corpus in equity and equity-related securities belonging to the largecap domain. It will invest the balance in equity and equity-related securities falling outside the largecap domain, as prescribed by Sebi or Amfi from time to time, and in debt securities and money market instruments. The scheme manages assets worth Rs 16,102 crore as on March 31.


Should you worry?
“Technically, there is no change in the scheme. Only the name has changed. We advise investors to hold back and continue with the scheme,” says Ankita Tanna Narsey, Founder, Oaktree Financial Advisors.

The scheme continues to be a largecap category. This scheme had a provision which allowed the fund manager to increase the number of stocks beyond 20 if the assets of the fund grew beyond Rs 1,000 crore. This limit was crossed many years ago. The scheme on an average had 47 stocks in its portfolio in the the past three years.

Mutual fund advisors also point out the scheme’s attractive performance record. “It is not a very aggressive fund and aims to deliver returns which are two-three per cent above Nifty returns and the fund has been doing that very well,” says Chirag Gokani, Founder, Wealthwiz Advisors. Unless your financial goals have changed, you need not do anything to your investments in ICICI Prudential Focused Bluechip Equity Fund, he adds.

Sebi has issued a circular on categorisation and rationalisation of open-ended mutual fund schemes in October 2017. To ensure uniformity among the schemes belonging to the same category, Sebi mandated largecap schemes to invest minimum 80 per cent of total assets in largecap companies. Largecap companies have been defined as top 100 companies in terms of market capitalisation.