ICICI Special Situations Fund offers 96.56% returns

ICICI Prudential India Opportunities Fund has delivered 96.56 per cent returns in one year. The performance has led the scheme to outperform many of its own peers but also the scheme has done better than the best performers in flexi cap fund category, large-cap, ELSS and MId cap fund category. Among thematic and sectoral schemes, the fund stands at the sixth position in the last one year. Special situations funds are new and there are only a few schemes with a track record at the moment. Apart from ICICI, Sundaram Services Fund and Axis Special Situations Fund are the other funds available in the market. ICICI Prudential India Opportunities Fund is managed by veteran fund manager S Naren, who is known for his contrarian and value investing style. The scheme, launched in January 2019, has outperformed its benchmark index by a wide margin of around 30 per cent. Special situation funds are a relatively new category of mutual funds in the Indian mutual fund space. These schemes look to capitalise on extraordinary situations that companies may face from time to time. These special situations can occur due to a crisis in a company, sector, or market, regulatory changes and global events or uncertainties.“Special situation investing tends to generate sizable alpha over long periods of time. While the performance could be volatile over a shorter duration, as and when the high conviction calls start playing out over the medium term, this strategy aids in delivering meaningful alpha. Over the last 18 months, we had witnessed several special situation opportunities which we capitalized on which ultimately aided in delivering very encouraging investment outcomes for our investors,” said S Naren, ED & CIO, ICICI Prudential Mutual Fund.A glance at the fund’s portfolio shows that the gains were mainly focused on some sectors that the scheme is overweight on. Power, telecom, pharma, metals and oil and gas have been the biggest allocations in the fund’s portfolio. Over the last one year, the top performers in the fund were Tata Steel, Hindalco, Tata Power, ONGC and Bharti Airtel. “Although it is a thematic fund, the portfolio is well-diversified across different sectors. The fund has done well across categories in recent times as well. Despite the performance and diversification, the fund follows a special situation theme which can be cyclic and does carry additional risk," said Harshad Chetanwala, Founder, MyWealthGrowth, a financial planning firm, based in Mumbai. "For most investors, it is better to invest in a diversified fund instead of thematic funds to build their core portfolio. A small allocation of additional surplus after their core investment may be considered in the fund. At the same time, because of the cyclic nature of the fund, the fund is suitable for investors with moderate to high-risk appetites,” said Chetanwala.

from Economic Times https://ift.tt/3DbNdRZ