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ICICI Prudential Banking and Financial Services Fund

This is a mutual fund that concentrates on investing in the banking and financial services sector. It can invest as much as 70% in banks and 25% in NBFCs. It also provides investors with the opportunity to create wealth over a long term. It features facilities like 0 entry loads, systematic investment plans, systematic withdrawals and transfers too. Investments in this fund can either be made in lump sums or in monthly/quarterly instalments.

Type or nature of fund

This is an open-ended sectoral fund

Investment objective

The objective of this fund is to concentrate investments in the banking and financial services sector with the aim of providing long term wealth creation. It also may invest a small amount in short term debt instruments as a defence measure aging erratic movement in the equity markets.

Fund information

Inception date 22 August 2008
CRISIL rank This product has not been rated by CRISIL
Plans Regular and Direct
Options Growth and Dividend with the default option being dividend reinvestment
Schemes
  • ICICI Prudential Banking and Financial Services Fund - Direct Plan - Dividend
  • ICICI Prudential Banking and Financial Services Fund - Direct Plan - Growth
  • ICICI Prudential Banking and Financial Services Fund - Regular Plan - Dividend
  • ICICI Prudential Banking and Financial Services Fund - Regular Plan - Growth
Entry load Nil. However, if the investment is made through an authorised distributor then the investor will have to pay them a commission.
Exit load 1% if the amount being withdrawn or switched has been invested for less than a year.
Minimum investment
  • For new investments Rs. 5,000.
  • For additional investments Rs. 1,000
SIP
  • Rs. 1,000 for monthly SIPs
  • Rs. 5,000 for quarterly SIPs
Product label
  • The risk factor of this fund is High.
  • It is meant for those looking for long term wealth generation and are ok with high risk investments.
Benchmark S&P BSE BANKEX This is an index that is made up of companies that are a part of BSE 500 and are classified as banks.
SWP The minimum systematic withdrawal plan is Rs. 500.
STP Available. The minimum STP out amount is Rs. 1,000 and the maximum tenure 10 years
Redemption The minimum amount that can be withdrawan is Rs. 500.
 

Fund manager(s)

Vinay Sharma

  • Education: MBA from IIM Calcutta and CFA from AIMR USA
  • Past experience:
    • ICICI Prudential Asset Management Limited – PMS Fund Manager
    • ICICI Prudential Asset Management Limited – Equity Analyst
    • AIG Global Asset Management India Limited - Equity Analyst -
    • J.P.Morgan India Private Limited - Equity Analyst
  • Other funds managed
    • ICICI Prudential Dividend Yield Equity Fund
    • ICICI Prudential Select Large Cap Fund
    • ICICI Prudential Multiple Yield Funds
    • ICICI Prudential Capital Protection Oriented Funds
    • ICICI Prudential Growth Fund Series 2
    • ICICI Prudential Growth Fund Series 4
    • ICICI Prudential Growth Fund Series 5
    • ICICI Prudential Growth Fund Series 6

Investment philosophy or strategy

The investment philosophy of this fund is to invest primarily in the banking sector. It will also allocate a sizeable amount of investment in the financial services sector and a small amount for short term debt instruments. To pick the stocks for investment, the fund adopts a bottom-up strategy.

Portfolio (As of June 30, 2015)

Company/Sector Investment
Banks
  • HDFC Bank Ltd. 15.99%
  • ICICI Bank Ltd. 12.12%
  • IndusInd Bank Ltd. 8.70%
  • Axis Bank Ltd. 7.39%
  • The Federal Bank Ltd. 5.86%
  • The Federal Bank Ltd. - Futures 1.00%
  • DCB Bank Ltd. 3.94%
  • State Bank Of India 3.86%
  • City Union Bank Ltd. 3.22%
68.40%
Finance
  • Bajaj Finserv Ltd. 5.33%
  • Repco Home Finance Ltd. 4.12%
  • Max India Ltd. 3.25%
  • Sundaram Finance Ltd. 3.19%
  • Muthoot Finance Ltd. 2.51%
  • SKS Microfinance Ltd. 2.03%
  • IDFC Ltd. 1.88%
  • Reliance Capital Ltd. 1.64%
25.69%
Short Term Debt & Net Current Assets 4.22%

Risk measures

Sharpe ratio 0.84
Alpha  
Portfolio beta 0.86
Std deviation 23.92% (annual)
 

Performance

AUM Rs. 841.73 crores (As of June 30, 2015)
NAV (As of June 30, 2015)
  • Regular Plan Growth Option: Rs. 37.09
  • Regular Plan Dividend Option: Rs. 28.23
  • Direct Plan Growth Option: Rs. 37.85
  • Direct Plan Dividend Option: Rs. 36.14
Expense ratio
  • ICICI Prudential Banking and Financial Services Fund Direct Plan - 0.95
  • ICICI Prudential Banking and Financial Services Fund Regular Plan
    • First 100 crores of daily net assets - 2.5%
    • Next 300 crores of daily net assets - 2.25%
    • Next 300 crores of daily net assets - 2%
    • Balance daily net assets - 1.75%
    • Additional charge of a maximum of 30 bps on sales outside top 15 cities
 

Returns

   2014-2015 (Absolute Returns) 2013-2014 (Absolute Returns) 2012-2013 (Absolute Returns) Compound Annual Growth Rate (Since Inception)
Scheme 20.42% 46.67% 19.39% 21.06%
NIFTY 9.95% 30.28% 10.67% 10.09%
NAV (in Rs.) 30.8 21 17.59 -
 

If someone had invested an amount of Rs. 10,000 when this fund was first introduced, the value of that investment today would be Rs. 37,090 as per the schemes performance. Had the same amount been invested directly then its value according to Nifty would have been 19,338.18 and 31,524 according to the benchmark.

Expert view of the fund

This is a fund that offers a high risk investment opportunity to investors. It also is meant for those who are looking to create wealth and are ok with the risk factor. In terms of returns, the fund has outperformed Nifty consistently between 2013 and 2015. It has even outperformed its benchmark in the same period, especially in 2013-14, where it gave absolute returns of 46% against the returns of the benchmark of 32%.

How to apply

There are two ways in which investors can apply for this fund. The first is to apply for it online. To do that, they can visit the ICICI Prudential website where they will have to register as new or existing investors. Once they have completed the registration process, they will be able to invest in this fund.

The other method is to apply for this fund offline where the investors can approach the ICICI Prudential branches and get help with filling out the forms and fulfilling any other paperwork as required. They can also pay for the investments through debit cards, cheques, demand drafts or NEFT and RTGS transfers. The investments made in this fund can either be lump sums or SIPs.

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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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