ICICI Prudential Innovation Fund

The fund has delivered a 1-year XIRR of 20.41% and a 3-year XIRR of 12.01%, outperforming the category averages of 14.1% and 16.82% respectively over the same periods. Over the 1-year horizon, the fund's CAGR of 8.32% significantly beat the NIFTY 50's -2.37%, with positive alpha across all time frames. However, the 3-year XIRR lags the category average, indicating a recent slowdown in SIP performance relative to peers.

The fund exhibits a maximum drawdown of -16.51% with a recovery period of 173 days, and has experienced 2 drawdown events exceeding 10%, indicating moderate downside risk. The Calmar ratios of 1.36 (1Y) and 1.33 (3Y) suggest reasonable risk-adjusted returns relative to drawdown. With a beta below 1 (0.88 on 1Y) and downside capture around 77%, the fund tends to be less volatile than the benchmark, though it also captures only about 92% of upside moves.

The top 10 holdings account for approximately 32% of the portfolio, with the largest positions in Maruti Suzuki (5.45%) and ICICI Bank (5.01%), indicating a blend of cyclical and financial names. Sector concentration is moderate, with Automobiles (11.3%) and IT Software (9.2%) leading, followed by Retailing, Pharmaceuticals, and Banks. The fund holds 67 stocks, providing reasonable diversification across sectors, though it is classified as sectoral/thematic, which may imply a specific investment focus.

The fund's 1-year XIRR of 20.41% is well above the category average of 14.1%, showing strong recent performance, but its 3-year XIRR of 12.01% is below the category's 16.82%, indicating inconsistency over the medium term. Calendar year returns show high volatility, with 35.86% in 2023, 29.85% in 2024, but only 11.43% in 2025 and 3.26% in 2026, reflecting a cyclical pattern. This suggests the fund may perform well in certain market conditions but has not maintained a consistent edge over peers.

This fund is suitable for investors with a high risk tolerance and a long-term horizon of at least 5-7 years, given its sectoral/thematic nature and potential for significant drawdowns. It may appeal to those seeking exposure to innovative and growth-oriented sectors, but investors should be prepared for periods of underperformance relative to the broader category. The fund is not ideal for conservative investors or those needing stable, consistent returns over short periods.

• Strong 1-year XIRR of 20.41% significantly outperforms the category average of 14.1%.
• Consistent positive alpha over all time frames, with 1-year alpha of 9.60% and 3-year alpha of 13.54% versus the NIFTY 50.
• Lower downside capture (around 77%) compared to upside capture (around 92%), indicating better protection during market declines.

• 3-year XIRR of 12.01% lags the category average of 16.82%, indicating underperformance over the medium term.
• Maximum drawdown of -16.51% and two drawdown events exceeding 10% highlight significant downside risk, which may be uncomfortable for risk-averse investors.