The ICICI Prudential Banking and Financial Services Fund is a sector fund that focuses primarily on specific sectors such as banking and finance. It is one of the best funds in the banking sector. This fund is recommended for those wishing to make long-term investments in the banking and financial sector. It has given good returns as compared to other funds of the same category.
The banking sector is the backbone of any economy and will be a high-performing sector, especially in a growing economy like India. Indeed, recently there have been many problems with public sector banks, and this problem of mismanagement with NPAs and PSBs has been chronic.
Basic Details of ICICI prudential Banking and Finance Services Fund
- Fund House: ICICI Prudential Mutual Fund
- Launch Date: 22-Aug-2008
- Return Since Launch: 18.12%
- Benchmark: NIFTY Financial Services TRI
- Riskometer: High
- Type: Open-ended
- Assets: ₹ 3,615 Cr
- (As on 31-Jan-2020)
- Expense: 2.11%
- (As on 31-Jan-2020)
- Risk Grade: Average
- Return Grade: Average
- Turnover: 44.00%
Performance of the ICICI prudential Banking and Finance Services Fund
Since its inception, the ICICI Pru Banking and Finance Services Fund have produced 19.28% returns. It has provided returns of more than 20% over a horizon of over five years. It has a good portfolio of 28 stocks, and most have performed well in the last three years.
Investing in their long-term direct plan in SIP mode would be the right choice, as the market is currently bullish, especially when the Bank Nifty is above the 24k level.
When you are invested in equity markets, you should not look at the performance of the fund in isolation. You have to look at its performance in the same category as other funds as well as indices like Bank Nifty.
Why are people growing in ICICI Pru Banking?
Those seeking finance to meet their needs will be helped in a positive way in the financial sector in the coming years. Consumption principles will always be there in India, and increasing penetration of people in the banking sector will help banking and financial companies and will see results in the coming quarters. The ICICI Banking and FS Fund is the best performing fund in the sector and have a solid track record in history. (Disclosure: I have held this fund for some time and continue to invest regularly; I have seen a hedging allocation in their monthly report. Therefore, a risk management strategy in place.).
Conclusion: For 3-5 years, you should invest at least to see meaningful results. Over five years, you can see a 20 per cent drop in your portfolio, then a 50 per cent increase next year. Do not think about these. Just stays invested, and do so systematically. The equity markets have been weak since January 2018 and, worse, the banking sector, due to several problems with public sector banks. I think this should be seen as an opportunity to invest more money in this sector through a fund like this.