scorecardresearchICICI Prudential Value Discovery Fund has given nearly 40% returns in the

ICICI Prudential Value Discovery Fund has given nearly 40% returns in the past year; should you consider investing?

Updated: 13 Apr 2022, 12:31 PM IST

Parking money in ICICI Prudential Value Discovery Fund helps earn from both dividends and capital appreciation over a period. 

Earning from both dividends and capital appreciation.

Earning from both dividends and capital appreciation.

ICICI Prudential Value Discovery Fund has given over 38 per cent returns in just one year. The fund is currently at the top position on the Yield to Date (YTD) returns chart in 2022.

Details of the fund

Launched on August 16, 2004, the current assets under management (AUM) amount to 23,149 crore. This open-ended fund is classified under the “Very High Risk” category with its AUM enlisted in the top 25 per cent of comparable funds.

What is a “very high risk” category you might wonder? This is a classification where the chances of you losing your money is quite high since the fund invests in risky stocks to chase higher returns. 

Investors stand to gain from the combined income from dividends and capital appreciation earned from investing in a portfolio of well-diversified value stocks.

The fund is benchmarked against the Nifty 500 TRI and is most sought after by investors yearning to earn high returns in the long run. This fund charges an expense ratio of 1.11 per cent similar to what is charged by other funds in this category.

The minimum amount you can invest in this fund is 1000 in a lump sum while you can make an added minimum investment of 500 in a lump sum in this fund. The minimum investment you can make through SIPs is 100. The exit load is 1.00 per cent of the sale value if the fund is redeemed before a year.

Asset allocation

Nearly 89.79 per cent of the fund’s portfolio is locked in equity holdings with domestic equity holdings figuring up to 82.10 per cent of the total and the remaining amount parked in 7.69 per cent. Of the total equities invested into the fund, 63.66 per cent constitute large-cap investments, 9.02 per cent in mid-cap investments, 4.01 per cent include small caps while other equity holdings amount to 13.08 per cent.

How many mutual funds are too many?

The portfolio constitutes value stocks that have attractive valuations about earnings or book value or current and or future earnings.

The returns factor

The scheme has earned more than 34 per cent returns in a year while the absolute returns over five years are 95.89 per cent. Since its inception, the absolute returns on this fund have been 2505.30 per cent.

Name of the mutual fundOne-year Returns (in %)
ICICI Prudential Value Discovery Fund38.41
Union Value Discovery Fund 29.23
JM Value Growth Fund27.30
Indiabulls Value Discovery Fund25.26
DSP Value Growth Fund 16.47
Table showing high risk category mutual funds in the decreasing order of one-year returns 

Tax treatment

If the units of this fund are redeemed within a year of investment, the gains from this fund are subject to short-term capital gain tax (STCG), i.e., 15 per cent.

Long-term investors redeeming their investments after one year will be exempted from tax on gains up to 1 lakh. More than 1 lakh gains would be subject to long-term capital gains tax, i.e., 10 per cent. There is no cess or surcharge on the funds sold before or after one year.

The fund’s dividends get added to the investors’ income and are taxed as per the respective income tax slabs. If an investor’s income exceeds 5000 in any financial year, the fund house deducts at source 10 per cent tax before distributing the dividend.

Disclaimer: Mutual funds are subject to market risks. Please read the offer document carefully before investing. Also, the Securities and Exchange Board of India has stipulated the latest guidelines categorising this fund under the “Very High Risk” category.

First Published: 13 Apr 2022, 12:28 PM IST