ICICI Prudential PMS Contra Strategy has completed five years. This offering from ICICI Prudential PMS takes contrarian bets on equity stocks. The strategy invests in equity stocks which are currently not in favour in the market but are expected to do well in the long run. The portfolio may also have stocks of companies in sectors where entry barriers are high, sectors in consolidation or companies in special situations.
ICICI Prudential PMS Contra Strategy was launched on September 14, 2018. In a statement today (September 27, 2023), ICICI Prudential PMS said a lump sum investment of Rs 1 crore at the time of inception would have grown to approximately Rs. 2.4 crore by 14 September 2023, with an annualised return of 20%. A similar investment in S&P BSE 50 TRI would have yielded an annualised return of 14% at approximately Rs. 1.8 crore.
“The performance draws attention to the investment framework which revolves around the core belief that companies create wealth, not markets, said Anand Shah, Head – PMS & AIF Investments.
“Identifying contrarian opportunities in the market played a pivotal role in the strategies performance, demonstrating the capability of capturing investment prospects and staying ahead of the curve,” Shah added.
Focus segments
In the last 5 years, the Contra Strategy largely focused on manufacturing and related sectors to generate alpha. According to the statement, manufacturing sectors like metals, industrial products, and auto ancillaries, along with manufacturing-related sectors like logistics, corporate banks, and utilities, were attractive investment opportunities which were available at reasonable valuations and offered strong earnings potential.
Another factor which aided in the strong fund performance is going underweight on Information Technology (IT), Consumer Goods and Pharmaceutical sector, it added.
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Portfolio
As of August 31, 2023, the portfolio of ICICI Prudential PMS Contra Strategy comprises 24 companies with the top 10 holding forming 56% of the portfolio. In terms of market cap breakup, large caps form 53.2% of the portfolio followed by smallcap at 25.6% and midcaps at 21.2%. Below is the performance as on August 31, 2023:
The statement further said that ICICI Prudential PMS relies on an in-house Business-Management-Valuation (BMV) framework that aims to identify resilient companies with a potential for long-term growth. “Through this framework, the team identifies strong companies with competent management that are trading at reasonable valuations. The end result of this process has been portfolios which are concentrated with regards to the number of holdings but which are diverse in terms of business fundamentals and industries. Thus, the BMV approach has helped ICICI Prudential’s PMS certain offerings to deliver alpha over the benchmark across varying timeframes,” it added.
Disclaimer: The above content is for informational purposes only, based on a press release by ICICI Prudential PMS. The views and facts expressed above are those of ICICI Prudential PMS and they do not reflect the views of financialexpress.com.