Prudential ICICI Balanced fund has struck the right cord with conservative investor - to hold a delicate balance between debt equity mix with a diversified portfolio. It is a lesson that has been learnt the hard way.
Launched at the peak of technology mania, the fund started off with a bang. The Rs 200 crore corpus, invested in a rising market, was predominantly parked in equities - 65%. Further, its aggressive TMT stance at 42% in early 2000 was parked in momentum plays and mid cap holdings in its technology investments such as HFCL, Zee, Aftek and Mastek which saw the fund gallop in the bull run. The rest of the portfolio is diversified across healthcare, FMCG and automobiles. Within the debt component, the fund has primarily held on to a liquid portfolio of triple A paper.
At the peak of the rally the fund on the back of an aggressive equity stance gained as much as 68 per cent. However, with the markets on a downward trail ever since, the fund has shed all the gains to rule below par. Even as the falling markets have restored the balance in the debt equity break up, the fund re did its portfolio by paring its predominant stance towards the TMT counters. Instead the fund has sought to broad base the portfolio across quality holdings in economy and healthcare stocks.
Prudential ICICI Balanced is at crossroads today redefining its self. While the fund may take a while to stabilise and hold ground, if the re-aligned stance continues it augurs well for its long-term performance.