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ICICI Prudential Balanced Fund

The ICICI Prudential Balanced Fund is now known as ICICI Prudential Equity and Debt Fund launched on 3rd November 1999. This fund is an aggressive hybrid scheme that focuses on equity and equity related instruments. It aims to produce a long-term capital appreciation and income invested in equity and debt of a portfolio. It is important to understand the exposure quotients of the scheme’s equity and debt which ranges between 65%-80% and 20%-35%, respectively.

Overview of ICICI Prudential Balanced Fund

The ICICI Prudential Balanced Fund is a fund that puts forth a combination of equity and debt investments. It is to facilitate wealth generation for a long term. These are referred to as the hybrid schemes or balanced hybrid schemes as they act as a link between equity and debt schemes. Therefore, these funds bring about a balance in growth and income through the investment made. It is particularly appealing to those investors who seek debt plus returns with higher risk than that of fixed income schemes.

There is a systematic investment and withdrawal choice offered by this scheme which comes along with a minimum investment of Rs. 5,000. The funds invested have attractive returns. This open-ended balanced fund has managed to consistently outperform its benchmark between 2013 and 2015. A good CRISIL (Credit Rating Information Services of India Limited) ranking adds on to the fund’s attractiveness. Moreover, investments made through SIP have a double digit return. There are about 67% of the funds invested in the equity market and around 32% in the debt market. Sectors like software, Government securities and banks are the fund’s top performing sectors.

ICICI Prudential Balanced Fund’s investment philosophy is to adjust the risk on the returns through balanced investments. Prudential balanced funds invest across market capitalizations; and have a sector agnostic investment approach. They earn substantial carry-over wealth by the exposure in well-researched corporate securities.

Investors can invest in this fund utilizing any of the two options. The two choices provided by ICICI Prudential are as follows:

  • Offline investments: The offline investments involve investors approaching ICICI Prudential branch. This is done to aid better understanding of the funds offered and to guide the investor through the procedurals. This includes filling pre-requisite forms to authorize and initiate the investment.
  • Online investments: The other option is to access the online facilities to initiate investments. To avail the online investment option, the investor can log on to the ICICI Prudential website and initiate investments. These investments have to be selected as per one’s requirement. It is accessible to all those who want to invest. One can pay for these investments using cheques or demand drafts or debit cards. Apart from the regular payment modes, one could also pay through NEFT (National Electronic Funds Transfer) or RTGS (Real-Time Gross Settlement).

Investment Objective of ICICI Prudential Balanced Fund

The Investment Objective of ICICI Prudential Balanced Fund is to offer long term capital, as specified before, through a balanced investment. This balanced investment is done on both the equity and the debt markets. It focuses on reducing the risk and volatility factor of the returns with the measured and calculative investments made. Let us briefly understand the both investments:

Debt

ICICI Prudential Balanced Fund debt scheme aims to take exposure in well-researched corporate securities. This is done to earn a sensible carry over wealth. As of 28th February 2019, the debt exposure is around 25%. It allocates funds on fixed income securities of longer durations. These income securities have a credit ranking of AA and above and offer a reasonable accrual. ICICI Prudential Equity and Debt fund scheme also takes an interest in investing in fixed income securities issued by the Government, quasi-government agencies. Along with the fixed securities issued by the Government, this scheme also invests in fixed income securities by corporate and multilateral agencies. This scheme has higher exposure to good credit quality instruments, inside the various debt holdings. It is beneficial to have a higher carry forward.

Equity

Equity funds exposure as on 28th February 2019 to large-caps around 87%, mid-cap of about 8% and small-caps around 5%. The equity scheme of the prudential funds invests across market capitalization. Market caps play an important role in this scheme, large-caps comprises of established enterprises. Under this, there are top 100 stocks by market capitalization. The mid-caps and the small-caps comprise of businesses that have great potential to grow over time. Depending on the Net Equity level of the scheme allocation is decided, which is done on the basis of the in-house price to book model.

Its investment approach remains sector agnostic and for stock selection a blend of top-down and bottom-up approach is used. Fund manager identifies stocks with prospective long-term growth to pick appropriate stocks but the stocks picked and traded are at modest to relative valuations. To minimize downside risk, the scheme takes any tactic that is allowed or derivatives of exposure for portfolio hedging. This scheme’s net equity exposure is of 71%. It is to be noted that the scheme’s net equity exposure includes foreign equity and units of equity mutual fund.

Statistics of ICICI Prudential Balanced Fund

Portfolio Index as of 28th February 2019Portfolio Values
Portfolio-Budget3.04
Portfolio-Equity18.60
Dividend Yield3.00
Dividend Yield59.26%
Top 10 sectors40.92%
Number of stocks84

The portfolio values are subject to changes and are not necessarily sustained as the same in the future.

ICICI Prudential Balanced Fund Performance

Mentioned below are ICICI Prudential Equity and Debt Fund’s performance as of 23rd September 2019:

  • Funds for 1 month, 3 months, 1 year, 3 years and 5 years were 5.33, -1.93, 1.63, 7.43 and nil, respectively.
  • Whereas the benchmarks were as following - 4.98, 0.88, 7.06, 9.23, 9.7 respectively for the abovementioned time frames.

Top Holdings of ICICI Prudential Balanced Fund

Top Holdings of ICICI Prudential Balance FundPercentage of Net Assets
Contnent R1C15.73%
NTPC Limited5.10%
Oil & Natural Gas Corporation Lt4.84%
ITC Limited4.77%
Bharti Airtel Limited4.20%
Vedanta Limited3.79%
State Bank of India3.70%
Indian Oil Corporation Lt3.00%
Hindalco Industries Limited2.92%
Infosys Limited2.87%

Why Invest in ICICI Prudential Balanced Fund

Investments on ICICI Prudential Balanced Funds are beneficial because of their reduced volatility. They provide assured returns as a portion of the investment goes into the debt funds and the other that goes into equities offer benefits of equities, simultaneously. These hybrid funds are advantageous for investors wanting to diversify their investments; these provide the flexibility of consistent returns combined with the participation in the growth of equity market. Lastly, it offers the benefits from accrual income and a long-term capital growth as well.

Those investors who look to participate in the growth story of the market of equity with a considerable portion of their portfolio being invested in the fixed income securities would find this scheme prospective and invest in the scheme for a time frame of three years and above.

Documents Required for ICICI Prudential Balanced Fund

The documents required are as per the following:

The Application form

Forms to open a funds account for SIP plans, ECS form, Risk Profile form etc. have to be filled to apply for this balanced mutual funds.

KYC Compliance

KYC, which stands for Know Your Customer, requires PAN card verification to occur. It is mandatory under the Government of India to get KYC completed so as to invest in mutual funds and such schemes. It is can be completed online. Documents like individual KYC form and passport-sized photograph are required.

An Identity Proof

There can be many identity proofs such as Aadhar card, PAN cards with photographs, passports, driving license, and voter’s ID card etc. Identity card or document with the applicant’s photo as issued by central or state government and its departments can be used. ID cards from Public Sector undertakings, scheduled commercial banks or public financial institutions, university affiliated colleges etc.

Proof of address

Listed below are some of the documents that can be used as proof of addresses:

  • Aadhar card
  • Driving license
  • Passport
  • Ration card
  • Voter ID
  • Flat maintenance
  • Voter ID
  • Bank account statements or passbooks (but only those that are less than 3 months),
  • Utility bills such as electricity bills etc. (less than 3 months)
  • Registered lease
  • Self-declaration by High or Supreme court
  • Address proof issued by bank managers of scheduled commercial
  • Identity cards with address, issued by central or state government, its departments etc.
  • A spouse’s proof of address is also acknowledged.
  • For minor investors parents are permitted to invest on behalf—a third declaration form has to be filled out.
  • Non-individual companies, trusts, firms HUFs etc. extra documents like certificate of incorporation, article of association, address proofs, deed of declaration, bank statements, signatures of authorised people, certificate of registration with SEBI, trust deeds and power of attorney for trusts etc.

These are the required documents that are necessary to initiate investments in the scheme. One can open a mutual fund account according to one’s appetite for risk and according to one’s monetary goals.

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