'Models have been an integral part of our funds'

Model-driven vs Human-led portfolios?

At ICICI Prudential, over the past decade and more, we have adopted an effective combination of fund managers guided by models to deliver optimal investment experience. Models have been an integral part of several of our schemes, such as the balanced advantage or the dynamic bond fund, to name a few.

Over the years, we have continuously refined our processes and enhanced our proprietary models to better interpret the changing market dynamics and optimise asset allocation. Eighty-five per cent of our funds are co-managed, bringing complementary perspectives and expertise, thereby ensuring that investment decisions are well-balanced and process-driven.

Post-stress test safeguards?

ICICI Prudential Mutual Fund has developed and implemented risk management systems and processes which are essential for business requirements. Hence, we had implemented liquidity risk management across all our equity schemes well before regulations made stress testing mandatory for mid-cap and small-cap-oriented schemes. Our mid-cap and small-cap schemes continue to demonstrate adequate liquidity under the mandated monthly stress test, the results of which are disclosed on our website.

On low-friction investing and investor churn.

With digital investing, we have seen investors becoming more hands-on and informed about their choices. While ease of transacting has increased, the encouraging trend is that investors are demonstrating greater awareness about asset allocation, risk profiles and the importance of long-term investing.

A key behavioural shift we have noticed is that investors are not reacting impulsively to short-term market movements as before, indicating a gradual rise in financial literacy and comfort with digital platforms. In response, we have focused on strengthening our investor education initiatives and building digital journeys that promote goal-based investing, such that investing remains purposeful and long-term in nature.

Rapid-fire questions

• One AMC you admire (not yours): M&G
• One hot trend you’re glad to have skipped for your investors: Launching a fund that focuses on IPOs.
• One fund manager, past or present, you would love to have on your team: Antony Bolton.
• Beyond returns, one criterion you want investors to judge your AMC on: Risk management.
• If not running an AMC, what would you be doing?: Banking.

This article was originally published on October 23, 2025.