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Consistent Player

Prudential ICICI Balanced is a very stable and consistent performer. Its performance during the last five calendar years is a testimony to that

The fund has remained in the top half of the category year after year. This year as well, the fund is marginally ahead of an average peer. Since the start of the year till August 7, 2006, the fund has risen 9 per cent, ahead of the category's 8.28 per cent.

Like most of the funds launched at the peak of the tech bubble, this fund also became the victim of the tech meltdown and landed in the bottom quartile in 2000.
Its 68 per cent gains earned in five months quickly turned into a 45 per cent loss by the end of 2000.

But things changed for the better from there on and the fund has comfortably beaten the category average in each of the subsequent years. The fund achieved that by making the much-needed amends after the collapse.

The exposure to equities was cut to around 55 per cent by the end of December 2000 from about 70 per cent at the start of the year. Within equities, it started to spread its assets across various sectors.

The fund also keeps a track of the changing times. It has made good use of the recent mid-cap rally. The allocation to riskier mid- and small-caps was increased to over 40 per cent from the previous 25-30 per cent late in 2003. But it kept the risk in control by diversifying and increasing the number of stocks to 35-40.

Now, in the aftermath of a recent decline, the fund has cut back the exposure to small stocks and large-caps consume almost 70 per cent of its equity allocation. This looks like a wise move, given the prevailing uncertainty.

On the debt side, the fund plays it safe. As interest rates have gone up, the fund has kept the average maturity of the portfolio on the lower side. In the last five months, it has not gone beyond one year. Cash holdings have also averaged over 12 per cent since the start of 2005.

To summarise, Prudential ICICI Balanced Fund does not take an ultra-aggressive stance on either of the asset class. And therefore, do not expect any miracles from this fund. But if you prefer stability and consistency over chart-bursting performance, then you will find its investment style to your liking.