ICICI Prudential Equity and Debt Fund – Review
ICICI Prudential AMC, launched in 1993 is one of the most popular and trustworthy mutual fund investment companies in India. It is also the largest Asset Management Company (AMC) in the country (in terms of AUM).
Given the recent volatility in the markets, the returns for most funds in the industry have been in the negative territory. Therefore, investors are looking for funds that protect their investments through debt as well as lead to capital appreciation by investing in quality stocks.
Such an objective can be achieved through hybrid funds. Though there are various categories of such funds and all fund houses offer this, only few of them have been able to sustain the pressure in the market and provide stable returns.
One such fund is ICICI Prudential Equity & Debt Fund. As you must have guessed, in this article we will highlight and delve deep into this fund and see how it can be helpful in order to achieve our long term goals.
Let’s begin!
Key Details
| Particulars | ICICI Prudential Equity & Debt Fund |
| Fund House | ICICI Prudential AMC |
| Scheme | Open Ended |
| Class | Hybrid Aggressive |
| Inception Date | 01/01/2013 |
| Benchmark | VR Balanced TRI |
| NAV (As on 18/03/2019) | 141.8 |
| Fund Size | 25,899 crores |
| Minimum SIP Amount | 100 |
| Minimum Lump sum Amount | 5000 |
| Expense Ratio | 1.04% |
| Risk Level | Moderately High |
| Fund Managers | S Naren, Manish Banthia, Atul Patel |
| Exit Load | Exit load is 1% and charged for redemption within 1 year for units in excess of 10% of the investment |
Returns generated by the fund as compared to its benchmark have been shown below:-
| 1-Year | 3-Year | 5-Year | |
| ICICI Prudential Equity & Debt Fund – Direct – Growth | 6.9% | 15.9% | 17.0% |
| VR Balanced TRI (Benchmark) | 12.85% | 14.5% | 12.8% |
The returns generated by the fund for the last one year as compared to the benchmark have been low. However, we cannot judge the fund by just looking at the one-year returns. As an investor, a substantial period should be considered before you invest in the fund.
Therefore, looking at the five-year returns, we see that ICICI Prudential Equity & Debt fund has handsomely beaten its benchmark.
Category
This is an aggressive hybrid fund, which means it invests 60% in equity and 40% in debt. This fund is preferred by investors because it provides decent returns and also balances out the risk as it invests in debt.
Portfolio
One of the most critical things that mutual fund investors must focus on while looking for the ideal mutual fund is the portfolio of the respective fund.
We can look at the portfolio by judging two major parts:
- Top 10 holdings;
- Allocation to various instruments
Top 10 Holdings
| Name | % of Assets | Sector | Instrument |
| ICICI Bank Ltd. | 5.9% | Financial Services | Equity |
| National Thermal Power Corporation Ltd. | 4.8% | Energy | Equity |
| Bharti Airtel Ltd. | 4.5% | Communication | Equity |
| Oil & Natural Gas Corporation Ltd. | 4.4% | Energy | Equity |
| Vedanta Ltd. | 4.0% | Metals | Equity |
| ITC Ltd. | 3.9% | FMCG | Equity |
| State Bank of India | 3.8% | Financial Services | Equity |
| Hindalco Industries Ltd. | 3.2% | Metals | Equity |
| Infosys Ltd. | 2.9% | Technology | Equity |
| Indian Oil Corporation Ltd. | 2.5% | Energy | Equity |
Allocation of Funds (Equity sector & Debt sector allocation)
Investment Objective
The investment objective of the fund is to generate capital appreciation as well as income from a portfolio comprising of equity and equity related instruments as well as through fixed income securities.
Let us now look at how ICICI Prudential Equity & Debt fund fares when compared to other mutual funds in the same category.
Looking at the chart above, we can see that the expense ratio of the fund is more or less in the range of other similar funds in the industry.
But the thing that stands out is the returns over long periods of time. This is where ICICI Prudential Equity & Debt beats the other funds in the market. Not just this, an SIP for this fund can be started with as low as INR 100 and therefore, it is easily accessible to all kinds of retail investors.
One negative thing to watch out for is the AUM size of the fund. The fund size is roughly on the higher side which is viewed negatively as the returns start to decrease once AUM increases a threshold limit.
Fund Managers
Let us look at the profiles of the fund managers, in order to gauge their experience and robustness in managing this big sized fund.
Mr. S Naren, Mr. Manish Banthia and Mr. Atul Patel are the fund managers for ICICI Prudential Equity & Debt fund.
1.S Naren
Mr. S Naren needs no introduction. He is one of the pioneers in the industry and currently is the CIO – Equities at ICICI Prudential AMC.
He joined the firm in 2004. He has more than 28 years of work experience in the market, ranging from investment banking, equity research, broking etc.
Prior Experience
Prior to joining ICICI, he has worked in Yoha Securities, Refco Sify Securities and HDFC Securities.
Education
He completed his engineering from IIT Madras and then went on to obtain MBA degree in Finance from IIM Calcutta.
Popular Funds Managed
- ICICI Prudential Balanced Advantage Fund
- ICICI Prudential Equity Savings Fund
- ICICI Prudential Infrastructure Fund
- ICICI Prudential Large & Mid Cap Fund
2. Manish Banthia
Mr. Manish Banthia has been with the company since 2007 and is currently a fund manager. He serves as a Fund Manager of various funds in the fund complex of ICICI Prudential mutual funds.
Prior Experience
Prior to joining ICICI Prudential MAC, he has worked in the product department at ICICI Prudential AMC, Aditya Birla Nuvo and Aditya Birla Management Corporation Ltd.
Education
Mr. Manish has extensive experience in this field including as a fixed income dealer. He is a qualified CA and MBA.
Popular Funds Managed
- ICICI Prudential Balanced Advantage Fund;
- ICICI Prudential Child Care Fund (Gift Plan);
- ICICI Prudential Equity Arbitrage Fund
3. Priyanka Khandelwal
Ms. Khandelwal has been working at ICICI Prudential Mutual Fund since 2014 and is a certified chartered accountant.
Education
She is a qualified chartered accountant and company secretary.
Popular Funds Managed
- ICICI Prudential Regular Savings Fund – Direct – Growth
- ICICI Prudential Technology Fund – Direct – Growth
- ICICI Prudential Liquid Fund – Direct – Growth
- ICICI Prudential Liquid Fund – Direct – Growth
4. Atul Patel
Atul Patel joined ICICI Prudential AMC in 2009 and is a certified Charetered Accountant
Education
Mr. Patel is a certified Chartered Accountant from The Institute of Chartered Accountants of India
Popular Funds Managed
- ICICI Prudential FMCG Fund – Direct – Growth
- ICICI Prudential Multicap Fund – Direct – Growth
- ICICI Prudential FMCG Fund – Direct – Growth
Conclusion
ICICI Prudential Equity & Debt fund has almost all the boxes ticked for suitability of investments for long term investors. Be it the returns generated, expense ratio, fund management quality, fundamentals of stocks invested or minimum SIP amount required.
Given all these benefits, if we are looking to bet on hybrid funds, we should consider this fund for deployment of our funds.
Happy Investing!
Disclaimer: The views expressed in this post are that of the author and not those of Groww