ICICI PRU INFRASTRUCURE : An analysis

ICICI Prudential Infrastructure has protected the downside well while growing at a fast pace. In fact the fund emerged as the fourth best diversified equity fund in 2006
Given the success of ICICI Prudential in the fund management space, it shouldn't come as a surprise to find the AMC's flagship infrastructure fund in the list of the best-performing infrastructure funds. In fact the fund emerged as the fourth best diversified equity fund in 2006. As infrastructure funds go, the fund is structured to exclude technology, FMCG and pharmaceutical companies. But beyond this similarity, there exist discernible characteristics in the fund's portfolio that set it apart from other infrastructure based funds. Get this: the fund's average exposure to basic and engineering stocks over the past one year has been only 8.7 per cent! As of the July end portfolio, the fund held only 3 per cent of its assets in one engineering company. Compare this to the fact that the average infrastructure fund holds at least 20 per cent of its assets in the basic and engineering sector. Another stark difference is that the fund is underweight on construction stocks relative to its peers - something that not many infrastructure funds would tinker with.Another unique proposition offered in the investment style is that the fund manager is a self confessed and value investor. While essentially the fund is growth oriented, it has a substantial representation of value picks. The fund has managed to strike an equilibrium between making contra bets and limiting its downside by maintaining smaller holdings. And this equilibrium has worked in the fund's favour, for it displays better resilience in a bear market relative to its counterparts. It is encouraging to see that in a short span of two years the fund's NAV has not plunged into a downward spiral in a falling market. A relatively less volatile performance coupled with an optimally diversified portfolio, make the fund a good pick in the infrastructure space