mutual fund investment
Mutual fund investment has always been believed to give strong returns in the long run. Today we are going to tell you about one such fund. Which turned an investment of Rs 10 lakh into Rs 37 lakh in 7 years. So let us know which fund is this and how it works. Actually, ICICI Prudential India Opportunities Fund is an open-ended equity scheme, which works on a special situation theme. This scheme has completed seven years providing better investment experience to investors.
Launched in January 2019, this scheme aims to achieve long-term capital appreciation by investing in companies that are going through corporate restructuring, changes in government policies or regulations, sector turmoil or other similar significant but temporary challenges. This scheme adopts a bottom-up stock selection strategy and has no market-cap or sector restrictions.
10 lakh rupees became 37 lakh rupees
Rs 10 lakh invested at the beginning of the scheme i.e. on January 15, 2019, would have increased to Rs 37.76 lakh by December 31, 2025, i.e. an increase of 21.02% per annum. At the same time, if the same amount had been invested in the scheme’s benchmark Nifty 500 TRI, it would have been Rs 28.05 lakh, i.e. an annual growth of 15.97%. This scheme of ICICI Prudential has given annual returns of 13 percent in one year, 23 percent in three years and 27 percent in five years.
How does this fund work?
The investment philosophy of this scheme is based on the idea that periods of uncertainty often create opportunities for price manipulation i.e. mispricing. These uncertainties can be at the level of a company, a sector or the entire economy, such as economic slowdown, changes in regulations, geopolitical events or temporary disruptions in business. This scheme seeks to invest in companies where such problems are temporary and long-term fundamental strength remains. Shankaran Naren, ED and CIO of ICICI Prudential AMC and fund manager of ICICI Prudential India Opportunities Fund, said, Special Situations are such special opportunities which companies have to face from time to time. These could be situations like sudden market turmoil, merger in the industry, change in rules. The purpose of investing in such companies is to convert these moments into opportunities for long-term investors. If these are identified in time, one can get significant benefits in the future. This type of investment requires deep research, so that both the true potential of the company and the risks associated with it can be understood. Investing in special situations can give good alpha in the long run, but it can be volatile in the short run.
SIP is an important part of this scheme
According to Naren, this scheme invests in limited but selected companies and the active share in it remains high. Its focus is on those opportunities where the market has not yet properly recognized the potential for improvement or increase in value of a company. Till December 31, 2025, the share of big companies i.e. large-cap stocks was high in this portfolio. This included financials, IT, pharma, construction and other sectors, which shows that the scheme is opportunity based as well as well diversified. Systematic Investing i.e. SIP is an important part of the strategy of this scheme. Since special situations can arise at any time, through SIP, investors can invest with discipline in different market cycles, which is likely to yield better results in the long run. ICICI Prudential India Opportunities Fund is suitable for investors looking to build long-term wealth and who are comfortable with the high volatility associated with equity investments based on special situations.