Diversification is a Dynamic Way of Investment

By Ashish Kyal – 

Diversification of funds is one of the crucial reason while people prefer Mutual fund over other investment instrument. Diversification is a way through which one can reduce his exposure to risk. In Mutual fund the fund manager invest the funds in different stocks and different sectors. This reduces the risk in investment as even if a particular stock or sector is underperforming there are other stocks and sectors which can provide stability to the fund. Although the risk in the investment does not becomes nil by diversification but the exposures become quite low than the level of exposure which an individual faces while he invest in a particular stock or sector.

ICICI Prudential Value Discovery Fund: Daily Chart

ICICI Value Discovery Fund Chart

ICICI Prudential Value discovery fund is an open ended diversified equity fund, which aims at stock which are available at a discount to their intrinsic value through a process of ‘discovery’ this process is called as Fundamental research. This process involves indentifying companies that are well managed, fundamentally strong and are available at bargained price.

Portfolio Analysis: As per the sectoral holdings Banking/Finance have been most favored sector for this fund as it is contributing 21.94% to the entire portfolio followed by Engineering and Technology Sector. Top Holdings and Sector Allocation for this fund are shown below –


Risk Profile:The risk is moderate in this fund as the investment is diversified among various assets. Average returns can be expected from this fund as it is outperforming at current levels. Investors looking forward for good returns with moderate risk should consider this fund for investments in staggered fashion or through SIP route.

In a nutshell, corrective action in this fund looks to be complete so investments in staggered fashion is advisable and SIP should turn out to be the best way as it will provide excellent cost averaging opportunities.


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