Balanced funds are fund that invest in both debt and equity to generate wealth greater than debt funds but also to suffer less if equity sees a downturn.
ICICI Balanced Fund: Investment Objective
This fund’s objective is to generate long-term capital appreciation and current income from a portfolio that is invested in equity and equity-related securities as well as in fixed income securities.
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|Absolute returns (%)||24.62||14.55|
ICICI Balanced Fund: Review
The fund seeks to provide the twin benefits of growth from equity markets and steady income from debt markets. With the approach of having a diversified allocation to a different asset class, the fund has managed an impressive show over the last couple of years outperforming the market.
The fund has comfortably outperformed its benchmark and category over 1-year and 3-year period returning 24.62% and 14.55% in absolute terms during the period.
The fund has traditionally maintained high equity allocation hovering at around three-fourths of the portfolio that is primarily invested in large-cap stocks (nearly two-thirds) which is higher when compared to peers (53%).
The latest portfolio holding suggests that a valuation conscious approach is followed with a mix of both cyclical and growth plays with financial, materials and utilities account for 50% of the pie.
On the debt portion, the fund has seen taking some aggressive calls but the average maturity remains well within the comfortable period of 5.13 years with the average credit quality of AA rating thereby indicating adequate safety.
On the debt front, the fund manager primarily seeks to invest in sovereign rating government bonds that accounts for 10% of the portfolio and rest in highly rated corporate bonds.
The fund manager seeks to maintain a pure play balanced portfolio as seen in portfolio beta of 1.03 which helps minimize volatility during market uncertainty. This is well reflected in the standard deviation of 10.12%.
Fund Managers: ICICI Prudential Balanced Fund
While the equity portfolio is managed jointly by Atul Patel since Aug 2016 and Sankaran Naren since December 2015; the debt portfolio falls under the purview of Manish Banthia since September 2013.
Mr Patel is a B.Com (H), Chartered Accountant and CWA and brings considerable experience in ADR/GDR and other foreign securities to ICICI Prudential AMC. Mr Patel has one year of experience as a Dealer and two years of experience as a Performance Analyst.
Mr Naren is a B.Tech from IIT Chennai and MBA (Finance) from IIM Kolkata. Prior to joining ICICI Prudential AMC, he has worked with Refco Sify Securities India Pvt. Ltd., HDFC Securities Ltd. and Yoha Securities.
Mr Banthia is associated with ICICI Prudential Asset Management Company since Oct 2005. Prior to joining ICICI, he was associated with Aditya Birla Nuvo Ltd and Aditya Birla Management Corporation Ltd. He holds a B.Com and an MBA degree and is a qualified Chartered Accountant.
To see more debt fund options, check out 5 Best Debt Funds to Invest in 2018.