Equity markets have been roiled over the past five months and many frontline indices – large, mid and small cap – have corrected sharply.
Even as there is limited clarity on when this decline in the markets would end, many segments of the market have fallen enough to present attractive long-term prospects.
Despite sharper corrections in the mid and small-cap spaces, large-cap indices now trade at much lower valuations.
And many pockets in the large-cap space may be even more attractive due to the deeper price cuts.
In the current environment when US trade tariffs, domestic growth concerns, weak corporate results and currency volatility present considerable challenges for investors, sticking to ‘tried and tested’ large-caps may be desirable.
Even otherwise, large-cap funds usually must account for a major part of the portfolios of investors, with a moderate risk appetite wanting relatively lower volatility.
As one of the largest and top-performing funds in the space, ICICI Prudential Bluechip is a fund that investors can consider for their core portfolio from a long-term perspective of 7-10 years.
The fund has a track record a little shy of 17 years and has delivered healthy benchmark and category-beating returns over the long term.
Taking the SIP route for exposure to the fund would help save smartly towards financial goals.
Consistently among the best
Over the past several years, many large-cap funds have struggled to beat standard bluechip benchmarks such as the Nifty 100 TRI or the BSE 100 TRI.
However, ICICI Prudential Bluechip has managed to comfortably beat the Nifty 100 TRI over the years.
Over the past 1-year, 3-year, 5-year and 10-year timeframes, the fund has delivered 1.1 per cent, 16.7 per cent, 19.2 per cent and 12.9 per cent, respectively on a point-to-point basis. The scheme outperformed its benchmark by 2-4 percentage points over the medium to long term.
When five-year rolling returns from January 2013 to March 2025 are considered, the fund has delivered mean return of 14.6 per cent. The Nifty 100 TRI, on the other hand, has delivered average returns of 13.3 per cent.
Also, over the aforementioned period, on a 5-year rolling basis, the scheme has beaten its benchmark Nifty 100 TRI a little shy of 80 per cent of the time. It has delivered more than 12 per cent over 76 per cent of the time during this period and more than 15 per cent for nearly 51 per cent of the time.
The fund’s SIP returns (XIRR) over the past 10 years are healthy, at 15.3 per cent. An SIP in its benchmark Nifty 100 TRI would have given 12.9 per cent over the same period.
All return figures pertain to the direct plan of the fund.
ICICI Prudential Bluechip fund has an upside capture ratio of 100.8, indicating that its NAV rises a bit more than what the benchmark does during rallies. The scheme has a downside capture ratio of 74.3, suggesting that the scheme’s NAV falls much less than the Nifty 100 TRI during corrections. A score of 100 indicates that a fund performs in line with its benchmark. These observations are based on data from March 2023-March 2025.
Healthy value mix
ICICI Prudential Bluechip invests 80-85 per cent of its portfolio in large-cap stocks, true to the requirements for large-cap funds. About 5-10 per cent of its holdings are in mid-caps, though exposure is made only to prominent names in the space.
The top two or three companies in any segment tend to figure in the portfolio, though weightage is decided based on valuation and other market factors.
Much of the fund’s focus is on picking value buys, though a few growth stocks also figure in the portfolio.
Banks have been the fund’s favourites and have occupied the most weightage in the portfolio. But other segments are rotated based on fundamentals and varying market conditions, though IT-software and petroleum products figure prominently.
In recent months, automobiles have been accorded increased weightage as valuations turn attractive after the correction over the past several months as have construction projects.
Minimising exposure to underperforming FMCG and cement sectors has helped the fund deliver better returns.
Barring banks, all other sector holdings are in single digits, making it a diffused portfolio across segments.
ICICI Prudential Bluechip holds cash to the tune of 7-10 per cent of its portfolio.
The fund is suitable for investors across the board looking for consistently above-average returns without taking undue risks.
Why invest
XIRR over past 10 years healthy at 15.3 per cent
Invests 80-85 per cent of portfolio in large-cap stocks
Much of the fund’s focus is on picking value buys