ICICI Prudential Value Discovery Fund (G) has been performing for three years about winning peers and a benchmark.

The main reasons I can think of here are:        

  • Excessive allocation for single pharmaceutical stocks (10% +): Sun Pharma, which has been under-performing for over two years now.
  • Under-performing IT companies (12 percent +): Allocation for Wipro (7.65 percent) Infosys (4.91 percent) these two stocks have struggled again in the last 2–3 years.
  • But in my view, for the following reasons, it is a super fund to start SIP:
  • The fund will give better returns when the pharmaceutical and IT sectors are in trouble.
  • The fund has consistently performed well over the long term (5 years, seven years, and ten years), always beating peers and benchmarks.

So my advice in this fund would be to stick to SIP, and you can get good value in the future.

The icici prudential value discovery fund is a multi-cap fund and has consistently delivered excellent returns to investors.

The fund is more than ten years old and has generated returns that are comparable to its Nifty 500 benchmark. This fund is perfect for first-time investors

Some of the main points related to this fund are:

  • The risk involved in this fund is comparatively low as compared to the index.
  • 5-year and 10-year returns are above average.
  • About 90 percent of the investment is made inequities, and the remaining cash is to meet the liquidity needs of investors.
  • All markets are invested with the most extensive financial services and IT allocations.
  • Its returns for one year and three years are below the benchmark.
  • The fund has invested in very stable companies that have done very well over the years and is expected to perform very well in the coming years as well.

This fund currently ranks among the best in the diversified category. So invest for 3 to 5 years, this will help you to earn returns. Equity funds should always be treated from a long-term point of view. I suggest you stay invested as of now but keep a tack.

It will invest in stocks below its intrinsic value and will keep those investments until those stocks hit their true intrinsic value or are overvalued. This should be compared to other value-oriented funds in the market and not pure multi-cap funds.

Another point is that as of 2014, mid-cap and small-cap were mostly undervalued, and the fund was mainly invested in mid-cap and small-cap (around 50-60 percent).

Allocation for large caps has increased since 2014, as some of them are now undervalued and mid-cap and small-cap allocations are far less than 20%. The possible reason for this is that its AUM has exceeded in the meantime and it may have been challenging to find suitable undeclared small caps and medium caps compared to the previous era, and due to larger AUM, it has a more significant percentage in small caps might have become unmanageable.