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BW Businessworld

The Silver Bullet

ICICI Prudential Balanced Advantage Fund has grown immensely since 2013, with its assets swelling from a nominal Rs 250 crore in 2013 to a colossal Rs 16,400 crore plus as on date

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ICICI Prudential Balanced Advantage Fund

ICICI Prudential Balanced Advantage Fund is a “Dynamic Asset Allocation Fund”. It utilises a proprietary model based on Price to Book Value to determine an ideal split between equities and debt. The fund rebalances its portfolio daily, and the equity component in its portfolio ranges from 30 per cent to 80 per cent at any given point in time. The fund also utilises equity derivatives and arbitrage strategies to hedge its portfolio. By doing this, it can command equity- taxation, which further benefits investors by creating tax efficiencies.

The fund has grown immensely since 2013, with its assets swelling from a nominal Rs 250 crore in 2013 to a colossal Rs 16,400 crore plus as on date.

By buying stocks when markets fall and selling them on their way up, the fund, in a manner of speaking, saves investors from their innate own tendencies to do the opposite and make losses as a result; greed and fear often compel investors to sell stocks after they’ve fallen in value, only to buy them later after markets have risen. The equity portion of the fund is heavily skewed towards large caps, and the style of fund management is conservative. These strategies help cushion the blow to investors during falling markets.

RISK CONTROL MEASURES
- Daily rebalancing between equity & debt
- Predominantly large cap bias for the equity portion, limits on sector deviation
- Hedging using derivative strategies

Ideally Suited For…
Moderate risk investors who are looking to create wealth from equities by generating relatively stable, early double-digit returns over a 3 to 5-year horizon, but are worried about market volatility.

Why Invest Here in 2017
With multiple global and local factors in play, expect a rough ride for the markets in 2017. ICICI Prudential Balanced Fund will spare you the trouble of deciding when and how much to invest into equities, while keeping the overall risk levels in your portfolio in check. This can be your ‘shut and forget’ fund for the next five years.