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Booking Profits in Rising Markets

Ashwin Jain and Manish Gunwani, fund managers, ICICI Prudential Balanced Advantage, say that the fund's equity allocation is based on the prevailing market conditions

Ashwin Jain and Manish Gunwani, fund managers, ICICI Prudential Balanced Advantage, say that the fund seeks to provide investors a reasonable opportunity to benefit out of market volatility by following a dynamic asset allocation strategy.

Book Profits in Rising Markets Ashwin Jain and Manish Gunwani, fund managers, ICICI Prudential Balanced Advantage

What is your approach to managing the equity portfolio of this fund?
On the equity side the fund is managed actively based on valuations in the market, as the portfolio is constructed keeping in mind the conservative risk profile of investors. For allocation between debt and equity, the fund uses an in-house model, based on a long-term historical mean Price to Book Value (P/BV). Therefore, it increases allocation to equities when the market offers opportunities and books profits when the markets are rising.

The fund invests in a blend of midcaps and large caps based on relative valuation. While the large cap stocks represent established enterprises selected from the Top 100 stocks by market capitalization and aim to provide stability, the midcaps are smaller business entities with long-term growth potential. The allocation is decided on a tactical basis based on the prevailing market conditions.

Following a dynamic asset allocation strategy, the fund seeks to provide investors a reasonable opportunity to benefit out of market volatility.

What is your approach to managing the fixed income portfolio of this fund?
ICICI Prudential Balanced Advantage Fund's Debt Portion is actively managed based on the view of the debt market with an aim to benefit from changing interest rate cycles.

How often do you re-balance your debt and equity allocation?
The re-balancing of the equity and debt allocation is done on a daily basis using an in-house model, based on Price to Book Value (P/BV).

Please click here to read the analysis of this fund.