ICICI Pru Contra
ICICI Pru PMS | Equity | | PMSIME's View on ICICI Pru Contra
Strategy
Contra Approach
Investment Fund
ICICI Pru Contra follows a contra-oriented style of investing. While ICICI Pru PMS suffers from common MF-founded PMS concerns (churn in the investment team, lack of a tightly defined investment strategy), we take into cognisanse it's strong & consistent performance since inception & the presence of Anand Shah (a senior investment professional). While not our top-rated contra-investing scheme (contra investing in particular can be difficult in a larger AMC), ICICI Pru PMS Contra can be considered for investments.
Fund's Strategy View
A well-executed contra approach to investing can deliver substantial outperformance when executed well. But contra is often a difficult strategy to implement in practice, since it involves going against popular perceptions, and requires a fund manager with a very high level of conviction to pull off.
Fund Performance
The fund has outperformed peers in the last 5 year trailing returns. In terms of longer-term annual performance, performance has been highly consistent, with the fund having outperformed it's benchmark in over 80% of annual calendar years.
IME's View on ICICI Pru PMS
View on AMC
ICICI Pru PMS has shown a marked improvement under the leadership of Anand Shah as CIO, with stronger alignment between investment philosophy and execution. The AMC has delivered robust performance across strategies, supported by disciplined processes and access to the AMC’s extensive research ecosystem. Backed by ICICI Pru’s strong institutional framework and distribution reach, the PMS business is now demonstrating greater focus and stability, warranting a more constructive outlook.
AMC's Pedigree
ICICI Pru AMC is a top-3 Asset Manager in India, known for managing mutual fund assets. While being part of a larger asset management house has benefits like a central research team and distribution strengths, the AMC-driven PMS lacks the stability and defined processes of investor-cum-promoter driven PMS's.
AMC Team
ICICI Pru PMS previously had high FM churn, but current CIO Anand Shah, a seasoned investment professional and ex-Co-Head Equities at ICICI Pru, has improved the team's credibility. However, there remains a risk of churn as Shah is still employed.
Investment Philosophy
ICICI Pru PMS uses a loosely defined BMV framework (Business, Management, Valuation) in its investment strategy.
ICICI Contra Portfolio- Investment Strategy
ICICI Pru PMS Contra Strategy follows a contrarian investment style (investing in underperforming and out-of-favour stocks & sectors). The strategy is market-cap agnostic and aims to have a focused portfolio with an optimal level of diversification.
Investment Strategy
Contra Portfolio follows contrarian investment style which is driven by:
- Out of the flavour: Investing in companies where prevailing sentiments not positive
- Focus: Widespread pessimism about company can drive price low. Prices tend to overstate the risk and understate the prospects of recovery.
- Avoid: Widespread optimism leads to high valuation that may in turn lead to correction when valuations are not justified by fundamentals.
- Herd Behaviour: Observe the herd behaviour as prices of stocks are pushed by investors to unsustainable level in both direction. Over reaction by market participants lead to underperformer become under valued and outperformer become over valued.
- Market Efficiency: Also observe the market efficiency as investor behaviour causes market to deviate from fundamental values creating inefficient markets.
Investment Process
- Identification: Identifying sectors or companies facing temporary headwinds.
- Selection Criteria: Selection based on ROE, ROCE, Market Cap by cash profit, P/E, Corporate Governance and capital allocation track record.
- Portfolio Construction: The portfolio is constructed by choosing sectors/companies which are facing temporary stress and are expected to survive in long.
Investment Framework
They utilise a 3 filter framework in order to search for companies with meaningful and sustainable earnings growth
- Business
- Management
- Valuation
Business Economics:
- Growth defined by Company growing faster than industry, industry faster than market, that are also looking for Structural and long-term sustenance and are simple to understand and in a focused segment.
- Moats defined by Brand Franchise, Industry Structure, Technology/Patents, Cost Advantage, License area, Distribution, etc
Management and Governance
- Competence driven by Sales(Faster than sector); Margin(Improving); Capital(Smarter)
- Governance based on Interests(Aligned with shareholders); and having credible Track Record
Valuation
- Cash- Cash flow being the centre of investment Process (Intrinsic value, DCF, Dividend Yield, Op. Cash Yield, etc)
- Evaluate Margin of Safety- Identifying a greater margin of safety based on weaker moat for a better risk-reward profile.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| ICICI Pru Contra | 7.2 | 22.8 | 27.7 | 20 |
| S&P BSE 500 | 4.1 | 14.5 | 19.6 | 14.7 |
| Alpha over Broad Mkt BM | 3.1 | 8.3 | 8.1 | 5.3 |
Performance as of: 31-Oct-25 | Inception Date: 14-Sep-18 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Anand Shah | 4-star rated FM
Fund Manager | 26 yrs Experience | 5 yrs at current firm
Past Experience: VP investments (Kotak MF), Co-Head Equities (ICICI Pru AMC), Head Equities (Canara Robeco AMC), Dy CEO & Head of Investments (BNP Paribas Asset Management), CEO (NJ Asset Management)
Anand Shah is currently serving as the CIO at ICICI Prudential AMC. He brings over two decades of fund management experience, having earlier worked with ICICI Prudential AMC as Co-Head Equities. Before rejoining ICICI, he was CEO at NJ AMC, Deputy CEO and Head of Investments at BNP Paribas AMC for nearly nine years, and Head of Equities at Canara Robeco AMC. His career also includes key roles at Kotak AMC.
Chockalingam Narayanan | 4-star rated FM
Fund Manager
Past Experience: Fund Manager (BNP Paribas), Deutche Equities, Batlivala & Karani Securities
Narayanan has 15+ years of experience in fund management, and investment research. Prior to joining ICICI Pru AMC, he was at BNP Paribas, Deutche Equities and Batlivala & Karani Securities. He has a PGDM from TA Pai Management Institute, Manipal. He also passed the FRM certification by Global Association of Risk Professionals, USA.
