ICICI Prudential Mutual Fund is one of the top asset management companies in the country with staggering assets under management. It would be foolhardy to recommend lumpsum investment in equity mutual funds when the markets are at a new peak. However, if you stagger your investment each month by way of Systematic Investment Plans (SIPs) you can hedge your risk and over the longer term also generate wealth. Here are 4 SIPs which you can consider from ICICI Prudential Mutual Fund.
ICICI Prudential Midcap Fund
This fund has given a phenomenal returns of 83% in the last 1-year. Having said that most midcap mutual funds have given similar returns. Please note, before investing in midcap mutual funds, the reader should be willing to take the risk as these funds are highly volatile and returns can be all over the place.
This fund is among the very old names in the midcap space and was launched in 2004. 96% of the funds are invested in midcap stocks, while the balance of the assets under management are held in cash and cash equivalents. Not a very big amount is required for investing in SIPs - in fact, investors need just Rs 1,000 every month by which they can start a Systematic Investment Plan. The expense ratio of 2.39% is on the higher side.
Investors who are keen to stay invested for a longer period of 5 years can consider the ICICI Prudential Midcap Fund.
ICICI Prudential Savings Fund
This fund tends to diversify the mix of the assets under management by investing in debt and money market instruments of various maturities with a view to maximising income while maintaining a good balance of yield, safety and liquidity.
If we see the returns from the fund over the last 1-year it is 5.15%, which is slightly more than what the big nationalized banks in the country are offering in terms of interest. The 3-year returns has also been in line with the interest rates from the banking sector at that time. The returns of the fund on 3-year basis has been around the 7.76% mark.
This fund is for those looking at high safety as well as high returns. The returns from the fund are expected to be broadly in line with interest rates in the economy.
ICICI Prudential Bluechip Fund
While we earlier recommended a midcap fund and a pure debt fund, we now recommend a largecap fund. The assets under management are invested in companies with large market capitalization to generate superior returns.
If you are looking for investing through SIPs you can do so with an amount of just Rs 100. The initial amount to is for a sum of Rs 100. In case you want to redeem the units before 1-year there is a 1% exit load as is the case with all equity mutual fund schemes.
This is one of the larger equity mutual funds in the country with assets under management of more than Rs 28,000 crores. The fund has given a 1-year returns of 47%, while the three year returns is 13.54% on an annualized basis. An SIP of Rs 10,000 each month for the last 36-months would have generated a corpus of Rs 4.87 lakhs.
ICICI Prudential Liquid Fund
ICICI Prudential Liquid Fund tends to invest almost 80 per cent of the corpus in money market securities, while the balance would be placed in high quality debt instruments. So, essentially it is a debt fund, which looks for safety along with returns.
A bulk of the money is invested in treasury bills, while the balance is invested in high quality debt instruments like commercial paper of Reliance Industries, Chennai Petroleum, Tata Power etc.
You can start an SIP in this fund with an investment of Rs 99 per month only. This is an open ended fund with sizeable assets under management of a staggering Rs 36,000 crores. Go for this fund in case you want stability of returns with safety. Expect returns near the range of bank deposits. In fact, it maybe slightly lower than bank deposits as well.
Investors are advised caution before investing in the schemes above and should only invest if they are able to bear losses. Greynium Information Technologies, the author and the brokerage firm should not be held liable for any losses suffered on account of the decisions based on the above article. Please consult a professional advisor.
About the author:
Sunil Fernandes, the author of the article is a stock market expert and has spent about 27 years covering stock markets and mutual funds. He has worked with various publications including Hindustan Times, Deccan Herald, Oman Economic Review and Dalal Street Investment Journal. He was also engaged in equity research analysis.