ICICI Pru’s Business Cycles Fund posted a strong performance over the last 12 months, delivering an alpha of over 6%. Sharp focus on domestic cyclicals was a key performance driver, says Anish.
This fund leverages the extensive expertise that the AMC has built over the years in taking prescient top down calls at global and domestic macro levels translating into bold sector calls. The fund does not have the usual benchmark guardrails that limit over and underweight positions in sectors– and can and does therefore take sizeable sector bets.
The fund also manages a cash position between 0 to 10% to seize opportunities and an offshore stocks position that also ranges between 0to 10%, which is used when compelling ideas present themselves based on the AMC’s top down calls.
While the fund is optimistic on some of the big US banks, itis pruning positions in big Indian banks and shifting focus to financial services stocks in the insurance and asset management businesses, as it sees better value in these spaces – especially after Indian banks have delivered record profits which are now priced in.
The fund remains bullish on domestic cyclicals and is also adding positions in pharma and IT spaces.
This fund presents investors an ideal way to harness the AMC’s prescient macro driven top down calls, with its benchmark agnostic approach, with the potential to deliver strong alpha, which it is already beginning to show in its initial years.