Invest In Icici Prudential: A Balanced Fund Guide

ICICI Prudential Balanced Funds, also known as hybrid funds, are a great investment option for those seeking regular income and capital appreciation over the medium to long term. These funds invest in a mix of stocks and debt securities, providing investors with a diversified portfolio that carries moderately low to moderately high market risk. The proportion of asset allocation depends on the type of balanced fund chosen, with aggressive hybrid funds investing between 65%-80% in equity, and conservative hybrid funds investing as little as 10%-25%. ICICI Prudential Balanced Funds have historically delivered average returns of around 10%-12% over five years or more, offering better risk-adjusted returns at relatively low volatility.

ICICI Prudential Balanced Advantage Fund: Dynamic Asset Allocation

ICICI Prudential Balanced Advantage Fund is a dynamic asset allocation fund that invests in a mix of equity and fixed-income securities. The fund management team adjusts the allocation of investments between equity shares and bonds depending on their market outlook. The fund has no lock-in period and is suitable for conservative investors who want to avoid the volatility of pure equity funds.

ICICI Prudential Balanced Advantage Fund can be purchased directly from the ICICI Prudential Mutual Fund website, or through platforms like MF Central and MF Utility. Investors can also seek help from a mutual fund distributor or their bank. As of 31-Jan-2024, the fund had an AUM (Assets Under Management) of ₹54,142 crore, with an expense ratio of 1.49.

The fund has delivered returns of 11.41% since its inception 17 years ago. As of 10th October 2024, the latest NAV (Net Asset Value) was ₹70.82. The fund has a high-risk rating according to SEBI's Riskometer.

ICICI Prudential Balanced Advantage Fund is suitable for investors with limited tolerance for volatility. The fund manager rebalances the portfolio to take advantage of market movements, providing better risk-adjusted returns at relatively low volatility.

ICICI Prudential Mutual Fund: Regular and Direct options

ICICI Prudential Mutual Fund offers both Regular and Direct options. The only difference between the two is the commission paid to the broker/distributor. As an investor, you do not need to pay any additional fees to purchase any of these options. However, regular funds have a higher expense ratio, while direct funds have a lower expense ratio. This difference is due to the commission paid to the broker/distributor, with the lower expense ratio of direct funds leading to higher returns for investors.

ICICI Prudential Mutual Fund offers a range of investment options, including:

• ICICI Prudential Balanced Advantage Fund: This fund invests in a mix of equity and fixed-income securities, with the proportion of each dynamically managed depending on the market outlook. It carries a high risk and has no lock-in period.
• ICICI Prudential Multi-Asset Fund: This fund aims to generate capital appreciation by investing predominantly in equity and equity-related instruments, while also investing across other asset classes.
• ICICI Prudential Equity & Debt Fund: This fund provides investors with regular income and capital appreciation over the medium to long term. It is considered moderately low to moderately high risk compared to equity and debt funds.
• ICICI Pru Child Care Fund-Gift Plan: This fund falls under the category of best hybrid performers.

ICICI Prudential Mutual Fund offers several benefits, including liquidity, diversification across asset classes, professional fund management, accessibility, and tax savings for certain funds. It is important to note that mutual funds carry varying levels of risk and investors should consider their financial objectives, risk tolerance, and investment horizon before investing.

ICICI Prudential MF Balanced Funds: Multi-Asset Allocation

ICICI Prudential MF Balanced Funds, also known as hybrid funds, are a diversified investment portfolio that includes both stocks and debt securities in specific proportions. These funds offer investors regular income and capital appreciation over the medium to long term. The ICICI Prudential Multi-Asset Fund is one such fund that seeks to generate capital appreciation by investing predominantly in equity and equity-related instruments, as well as income by investing across other asset classes.

Multi-Asset Allocation funds, like the ICICI Prudential Multi-Asset Fund, invest your money in a mix of equity shares, bonds, and commodities, with each asset class typically having at least a 10% allocation at all times. This particular fund's portfolio is largely conservative, with most holdings in Large Cap stocks and debt instruments. As of 30-Sep-2023, the fund had invested 58.54% in equity, 18.19% in cash and cash equivalents, 12% in commodities, 10.53% in debt, and 0.81% in real estate.

The ICICI Prudential Multi-Asset Fund carries a very high risk according to SEBI's Riskometer. The fund value can fluctuate as the price of underlying stocks and debt securities change. Investors should consider their own risk tolerance and financial objectives before investing in this or any other balanced fund.

You can invest in the ICICI Prudential Multi-Asset Fund directly from the ICICI Prudential Mutual Fund website or through platforms like MF Central and MF Utility. As of 15-Oct-2023, the Net Asset Value (NAV) of the fund was ₹551.5547. The fund does not have a lock-in period, and the minimum SIP investment amount is ₹100.

ICICI Prudential Balanced Advantage Fund: Capital Gains Taxation

ICICI Prudential Balanced Advantage Fund is a mutual fund scheme that was launched on 12 October 1993. It is a high-risk fund that seeks to provide capital appreciation and income distribution to investors by using equity derivatives strategies, arbitrage opportunities, and pure equity investments. The fund management team may increase or decrease the allocation to equity shares depending on their market outlook.

Long-Term Capital Gains:

If you sell the mutual fund units after holding them for more than one year from the date of investment, the gains are taxed differently. Gains up to Rs 1 lakh in a financial year are exempt from tax. For gains over Rs 1 lakh, a tax rate of 10% is applicable.

Short-Term Capital Gains:

If you sell the mutual fund units within one year from the date of investment, the entire amount of gain is taxed at a rate of 15%.

No Tax:

As long as you continue to hold the mutual fund units, you do not have to pay any tax.

Dividends:

Dividends are added to the income of the investors and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS (Tax Deducted at Source) of 10% before distributing the dividend.

It is important to note that the above information is based on the sources available and may not be exhaustive. The tax rates and rules may change over time, so it is always advisable to consult a tax professional or financial advisor for the most up-to-date information regarding capital gains taxation for the ICICI Prudential Balanced Advantage Fund.

ICICI Prudential Balanced Advantage Fund: Riskometer Level

The ICICI Prudential Balanced Advantage Fund is a dynamic asset allocation or balanced advantage fund that seeks to provide capital appreciation and income distribution to investors. The fund's risk level is considered high as per SEBI's Riskometer. This means that there is a significant risk of negative returns on investment.

The fund's portfolio is largely conservative, with investments in Large Cap stocks and debt instruments. As of 31st January 2024, the fund had invested 41.77% in equity, 31.7% in cash and cash equivalents, 23.4% in debt, and 3.13% in real estate. The fund management team may increase or decrease the allocation to equity shares depending on their market outlook, making the proportions of equity and fixed-income securities dynamic.

When investing in this fund, it is important to note that there is a warning against investing if you need to redeem your investment in less than five years. The fund tends to fall less than pure equity funds when the stock market declines due to its debt allocation, making it suitable for conservative equity investors.

The fund has delivered 11.41% returns since its inception 17 years ago. It is important to note that balanced funds fall between equity funds and debt funds in terms of risk and returns, and ICICI Prudential MF Balanced funds are suitable for investors with limited tolerance towards volatility.

Frequently asked questions