ICICI Prudential Banking and Financial Services Fund

ICICI Prudential Banking and Financial Services Fund is being managed by Venkatesh Sanjeevi since Feb 2012. Banking & Financial Services as a sector did well in the past few years and have bright prospects. This fund has performed fairly well in most periods considered. This fund has been around for barely 4 years now. 

Where does ICICI Prudential Banking and Financial Services Fund invest your money?

ICICI Prudential Banking and Financial Services Fund is a  diversified equity Banking & Financial Services sector fund which invests your money in banks, NBFCs and other financial services firms. The portfolio is concentrated in stocks of large and mid cap companies belonging to this sector. About 65.34% of the fund’s money is allocated to stocks of large sized companies, 30.35% to stocks of mid sized companies and the 4.30% to those of small companies. Mid sized stocks can give kicker returns as they turn into large stocks but this happens not so frequently.

Suitable for what?
  • Creating wealth
  • Lifestyle needs
Not suitable for what?
  • Child's education
  • Child's marriage
  • Planning for retirement
  • Home Purchase
How has ICICI Prudential Banking and Financial Services Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Aug 2008, your value of investments would be around Rs 2.25 lakhs. The performance has been similar to average funds falling in its category. 

Assume you had invested Rs 10,000 every month in ICICI Prudential Banking and Financial services Fund through SIP for the past 4 years today you would have around Rs 8.93 lakhs.

How will ICICI Prudential Banking and Financial Services Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid sized companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 1000 per month. Do not make ICICI Prudential Discovery Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Do not make the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio. ICICI Prudential Discovery Fund can be part of the satellite portfolio.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Recommended
How frequently you need to monitor the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a quarter. Watch for any news or information that may affect the sector.

What are the charges applicable?

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of ICICI Prudential Banking and Financial Services Fund is 2.97%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

What are the tax implications?

The returns in an equity mutual fund are absolutely tax free, provided you do not withdraw within 1 year.

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