ICICI Prudential Equity & Debt Fund
(Erstwhile ICICI Prudential Balanced)

4 Value Research
Change from previous, NAV as on Feb 21, 2019
Category: Hybrid: Aggressive Hybrid
Assets: R 25,899 crore (As on Jan 31, 2019)
Expense: 2.00% (As on Jan 31, 2019)
Investment Objective

The scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent.

Fund Managers
+ Atul Patel since Aug 2016
+ Manish Banthia since Sep 2013
+ Sankaran Naren since Dec 2015
As on May 03, 2018

An impressive show in the last two years has propelled this fund from a three-star to a four-star rating. The fund invests a minimum of 65 per cent in equity. This allocation can go up to 80 per cent depending on market conditions.

The fund practises some degree of tactical allocation based on an in-house assessment of market valuations. Within equities, over 80 per cent of the allocation is parked in large-cap stocks, which is higher than the peers' allocations. It invests in a blend of large and mid-cap stocks, with a good track record and long-term growth potential. The allocation between large and mid-caps is decided on a tactical basis rather than any predefined ratio.

The fund follows a blend of growth and value styles. On the debt portion, the fund does take aggressive duration calls. Throughout 2015-16, for instance, the average maturity was higher than 10 years. This has been toned down lately to four to five years as interest rates have headed lower. While the fund seeks to add to returns based on rate calls, it is very conservative about taking on credit risks. Sovereign and money-market securities dominate its portfolio.

On a three-year and five-year basis, the fund has outperformed its benchmark by 2 to 5 percentage points and the category by 1 to 2 percentage points. Traditionally, the equity portfolio has been mid-cap biased. But in the last one year, its weights have veered sharply towards large-cap stocks. The fund is now significantly overweight on large-caps relative to the category.

A balanced fund which has tactical allocation to bump up returns.

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