Fund Review: ICICI Prudential Multiple Yield Fund - Series 11 Plan C

ICICI Prudential is offering a new fund called the ICICI Prudential Multiple Yield Fund - Series 11 Plan C. The scheme is a close-ended hybrid fund that will invest around 58-63 per cent of corpus in bonds, 25-30 per cent of the corpus could be invested in government securities. The scheme may also invest 12-17 per cent in equity and equity-related securities. The NFO opened for subscription on September 27 and it will close for subscription on October 10.

Fund manager speaks

“The fund has a unique structure of allocation to both debt and equity/equity-related securities that aim to limit downside while ensuring growth of investors’ investments,” said Chintan Haria, Fund Manager & Head – Product development & strategy, ICICI Prudential AMC. “In case of debt investments, the scheme will invest in investment grade debt securities maturing on or before the maturity of the fund,” he added.

The scheme is primarily meant for risk-averse investors, who invest mostly in traditional fixed income investments. The likely small equity exposure has the potential to offer extra returns. Fixed income investors in the higher tax bracket can consider investing in this fund as it qualifies for long-term capital gains tax of 20 per cent with the indexation benefit.

Expert’s take

“This is not the ideal fund for investors. If an investor wants to invest in debt, they should go for a pure debt fund. If they want exposure to equity, why should they opt for a debt-oriented scheme,” asks Amar Pandit, CFP, My Financial Advisor. “If the markets were low and the investor was a conservative one who wanted some exposure to equity, it would have made sense. But, at this point in time, when the markets are doing well, it is always better to go for a separate debt and equity fund,” Amar added.

The scheme at a glance

Name: ICICI Prudential Multiple Yield Fund - Series 11 Plan C.
Fund house: ICICI Prudential Mutual Fund
Tenure: 1387 Days
Benchmark: Crisil Composite Bond Fund Index (80%) and Nifty 50 (20%) Index.
Minimum application amount: Rs. 5000/- and in multiples of Rs.10 thereafter