Underweight on basic stocks, high on growth

FUND ANALYSIS/ ICICI Prudential

Out of the top five best performing funds in 2006, three were infrastructure funds. Given the success of ICICI Prudential in the fund management space, its flagship infrastructure fund was not to be left out "� it 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! 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 will tinker with.

Another unique proposition offered in the investment style is that the fund manager is a self confessed, compulsive, value investor. While essentially the fund is growth oriented, it has a substantial representation of value picks as well.

The fund has managed to strike an equilibrium between smaller holdings and a dash of contra bets. 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. Given its relatively less volatile performance history, the fund is a good pick in the infrastructure space.