In 2016, ICICI Prudential Mutual Fund became the largest fund house by assets. One of the funds that rode along with it into this stardom was ICICI Prudential Value Discovery Fund, a fund that started as a midcap fund in August 2004.
The ICICI Pru value discovery fund’s stated objective is to:
to invest stocks available at a discount to their intrinsic value, through a process of `Discovery’. The process involves identifying companies that are well managed, fundamentally strong, and are available at a price, which can be termed as a bargain.
Through this bargain hunting, it aims to discover and benefit from undervalued stocks.
It is relevant to note that with value investing, all that an investor looks for is a business that is available at less than its intrinsic value. (a subject for another day)
So, for example, if there is a manufacturing company whose current stock price is less than the total market value of all its assets including plant, machinery, land, cash in bank, etc, then it qualifies as an undervalued stock.
The question remains as to how much steadfast and committed did the fund remain to this approach.
Anyways, that didn’t matter to the investors…. [Continue Reading]