ICICI Prudential Tax Plan - Invest Online

The scheme seeks long-term capital appreciation by investing approximately 90 per cent of the investments in equity instruments, while the balance 10 per cent would be a parked in debt and money market instrument and cash ( Including-money at call).

ICICI Prudential Tax Plan has been one of the top performing funds in the ELSS category over the last five years, clocking a 21.5 per cent CAGR and beating the benchmark by a 10 percentage point margin. The fund has also managed to keep two paces ahead of its benchmark over different time frames, whether 6 months, 1-year, 3-year or even 10-years. Except for a rough patch in 2006-2008, the fund's performance across market cycles has been impressive, earning it a Value Research rating average of 4 stars for the last five years. It is currently a top-rated fund with a 5 star rating.

This fund had a distinct small-cap stock bias in its initial years but has later shifted to a safer strategy of a large-cap weight in its portfolio. Large cap stocks used to make up less than 50 per cent of the exposure pre-2010, with a fourth of the assets parked in small-cap stocks. But in the last four years, the fund has raised its large cap holdings while trimming exposure to both mid- and small-caps. In the last one year, the fund has favoured a 60-65 per cent large-cap holdings, about 20-25 per cent in mid-caps and another one-fifth in small-cap stocks.

It is however heartening that this shift has helped reduce the fund's risk profile but has not materially reduced its ability to outperform its category. The fund has managed to keep its performance on course despite quite a few changes in fund manager over the last 5-6 years.

The fund's performance has received a lift from its early move into cyclical sectors in this rally. Financials, engineering and chemicals are among the overweight positions in the fund relative to category. This has also lent a value bias to the portfolio with the average portfolio price-earnings multiple at a reasonable 15 times in June 2014. This positions the fund well to participate in any secular bull market. The fund has survived three different market cycles since inception and come out on top and is a good option for one seeking multi-cap exposures.