Vinay Sharma, a fund manager of the Rs 2600-crore ICICI Prudential Banking and Financial Services Fund, has moved to Reliance Mutual Fund. This is the second major fund manager departure from ICICI MF to Reliance. Earlier Manish Gunwani, who used to manage assets worth Rs 40,000 crore at ICICI Mutual Fund, left to become the Chief Investment Officer (CIO) of Reliance Mutual Fund.
The departure of a fund manager is a significant event for a fund scheme. ICICI Banking and Financial Services Fund got a new fund manager in January 2018. Since then, the fund has grossly underperformed its benchmark, delivering -5.58% compared to -0.62% for the benchmark. It has also underperformed the category average but only marginally.
Also to be fair, the underperformance also shows up in one-year returns, even before the current fund manager joined. The current fund manager Roshan Chutkey has been with ICICI Mutual Fund since 2015.
Reliance Mutual Funds seems to also be actively recruiting managers from other fund houses. In March 2017, Reliance MF recruited IDFC Mutual Fund’s Meenakshi Dawar as an equity fund manager.
What should you do?
A fund manager exit only warrants a closer watch on the fund. It does not automatically warrant an exit. A three-month underperformance is too short a time frame to conclude anything about the current fund manager.