- June 28, 2019
- Posted by: Vipul Shah
- Category: Large Cap Mutual Funds, Mutual Funds
This article is a quantitative analysis and review of one of the best mutual funds in India ( as many portal claims) named ICICI Prudential Bluechip fund with a mandate to invest in large cap companies. This fund has tested the bear period of 2008-2009 global recession as it was launched in May 23, 2008.
Here, I have analyzed 5, 4, 3, 2 and 1 yr rolling returns and compared against Nifty 50 TRI and Nifty 100 TRI.
Data available from 26/05/2018 to 30/05/2019
Approximate read time 7 minutes
To understand rolling returns click here
5 yr rolling returns analysis for ICICI Pru Bluechip Fund
In 5 yr rolling period, ICICI Pru Bluechip Fund out performed 99% where as yearly returns were 16.29% compared to 12.57% and 13.52% of Nifty 50 and Nifty 100 respectively that too with lower volatility.
Each iteration of 5 yr gave us a positive return of > 15%
Equity is an asset class for a minimum period of 5 years, the minimum returns could have been 38.38% i.e no loss at all
4 yr rolling returns analysis for ICICI Pru Bluechip Fund
Out of 1723 iteration of rolling period, fund beats 1671 iteration of Nifty 50 and 1617 iteration of Nifty 100, therefore as a result
Fund out performed by > 90% where as yearly returns were 15.74% compared to 11.97% and 12.95% of Nifty 50 and Nifty 100 respectively that too with lower volatility.
Each iteration gave a positive return of > 15% which beats the inflation and FD returns
Behavioral Finance Read : Is there a risk in mutual fund investing ?
3 yr rolling returns analysis for ICICI Pru Bluechip Fund
We have 1970 iteration of rolling period, and fund handsomely outperformed benchmark by >90%
Your investment could have fetch you 15.83% CAGR returns and returns above 10% were 1916 (49+1912)
2 yr rolling returns analysis for ICICI Pru Bluechip Fund
In 2 yr rolling return period fund is able to outperform both the benchmark by > 85% with lower volatility
1 yr rolling returns analysis for ICICI Pru Bluechip Fund
In 1 Yr rolling period, fund is able to beat the benchmark by > 80% which is a good sign, however fund fell to an extent of 18.13% which is lower than both the benchmark.
Based on past statistical data of 1 yr rolling returns, we now got an anchor that if invested in this fund, it can go down to an extent of 18% in any given year.
Not only that, if you look at Upside and Downside Capture ratio, whenever markets were down fund fell less
A downside capture ratio of less than 100 indicates that a fund has lost less than its benchmark during the periods when the benchmark has been in the red. If a fund manager has a down-market capture ratio of 81%, 89%, 93% and 90% for 10 Yr, 7 Yr, 5 Yr and 3 Yr period, which indicates that it captured less of its benchmark’s negative performance during market down ward timings. Lower the downside ratio it is better and such kind of funds tends to under perform during bull run which is evident from Upside Capture Ratio.
Behavioral Finance Read : Why do we prefer FD over Equities
Below are the SIP returns Since Inception, 5 Yr, 4 Yr and 3 Yr
30 Days Rolling Returns Analysis of ICICI Pru Bluechip Fund since inception
30 Days Rolling Returns Analysis of ICICI Pru Bluechip Fund for Past 5 Years
30 Days Rolling Returns Analysis of ICICI Pru Bluechip Fund for Past 4 Years
30 Days Rolling Returns Analysis of ICICI Pru Bluechip Fund for Past 3 Years
If you closely observe past SIP returns of 5, 4, and 3 years, returns are 13.69%, 10.58% and 15.34% respectively which are low compared to both the Index , Alpha (excess return) is diminishing.
Should you then invest in an Index fund?
Well, Investing in Index does not provide any downside protection, If you set your expectation anywhere between to 10-12%, ICICI Prudential Bluechip is a fund to remain invested considering the track record, upside and downside capture ratio and ability to beat the benchmark in all rolling returns period.
About the Author :
Vipul is a long term investor, started first SIP in 2007, remain invested for 10 long year and purchased a home (without a home loan) in Mumbai from accumulated corpus of Mutual Funds. He is a IT Professional turned Salesman turned Fee Only Financial Planner and now help individuals to achieve their financial goals. He conducts free financial literacy seminar in Co-op Hsg Society as a part of his mission to educate 1 Cr Indians. You can also schedule a free 30 mins call where he explains the behavioral aspect of investing and how to overcome them.