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Fund review - ICICI Prudential iWin Mid cap index

Fund review - ICICI Prudential iWin Mid cap index

TLDR: ETF review, history, fund composition, return and why is it in my portfolio?


The fourth fund / index that I am reviewing as a part of this series. Check out the other funds reviews here.

Index funds in the mid cap space are non existent, there are only 2 ETFs that track Mid cap indices in the Indian market.

History

The fund is relatively new, setup only on 4-Jul-2016. The ETF tracks the S&P BSE Mid cap select index. The investment horizon for this fund as per the fund fact sheet is 5 years or more. My advice as usual is to stick to greater than 7 years for anything longer term.

Fund particulars

Let us talk some numbers (as of 31-Jan-19)

  1. AUM - 13.96 Crores

  2. Expense ratio - 0.47%

  3. CAGR since launch (Jul 2016) - 9.75%

Source : Fund fact sheet

Two major concerns pop up here. The very small AUM of the fund raises liquidity concerns and the CAGR looks rather disappointing at 9.75%.

SIP Returns

Given that the fund has been active for lesser than 3 years from the date of inception, I am not including the SIP returns here as the number is not meaningful for this fund with an investment horizon of greater than 5 years.

Reasons to hold it

    The reason to hold this fund is to benefit from the potential future superstars from the mid cap space. The returns from launch are nothing to write home about, possibly because of the rout on the small and mid cap indices over the last couple of years.

The key risk that I see with the fund as mentioned earlier

  • Lack of liquidity in the market because of the small fund size

Since I have no plans to sell my holdings in a hurry, worst case scenario I could redeem this directly with ICICI who is the AMC if there is not enough liquidity in the market down the line. (Creation unit is 50,000 units and multiples thereof)

Alternatives

As mentioned previously, the only real alternative in the ETF space is

There are no real index fund alternatives that track either of the mid cap indices. Wish we had some though.

Rating

Based on the long term performance of this fund, I would rate this fund 6/10.

Why only 6/10 - liquidity.

My objective in owning this fund is to track Mid cap index (be it BSE mid cap select or CNX NIFTY mid cap index) for reasons stated earlier. Given that there are no ETFs or direct index funds that track this index, I am forced to pick one of the two real alternatives to track this index. Given the accumulation and disposal charges on trading of ETFs and the expense ratio, I would not recommend this fund for retail investors. But let us keep our eyes peeled for a future where mid cap indices are tracked via newly launched index funds.


What are your thoughts on this fund? Would you consider this index (not this fund itself) in your portfolio?

Lumpsum vs. Dollar Cost Averaging - DCA (Systematic Investment Plan - SIP)

Lumpsum vs. Dollar Cost Averaging - DCA (Systematic Investment Plan - SIP)

Why Worry?

Why Worry?