ICICI Prudential Balanced Advantage Fund: Fund Review

Market participants are currently undergoing a pessimistic phase. This is reflected in the Street’s reaction to the Covid-19 threat. In such a situation, retail investors have to be extremely cautious and act on time-tested strategies which are logically sound and have little scope of faltering.

The strategy recommended for the present market conditions is balanced advantage or dynamic asset allocation schemes. These schemes weigh the attractiveness of equity and debt and allocate funds accordingly. Generally, balanced advantage schemes invest 40-60% of their money in equities and the remaining part of the portfolio is invested in arbitrage and debt products. This facility helps such schemes contain any fall in returns and gain when either of the asset classes does well.

Among the balanced advantage schemes, ICICI Prudential Balanced Advantage is a top performer in the past five-year, seven-year and ten-year periods. It has given returns of 7.2%, 11.5% and 11.4% in the past five-year, seven-year and ten-year periods when its peers have given average return of 5.8%, 10.2% and 8.9% respectively over the same periods.


The scheme’s managers S Naren, Ihab Dalwai, Dharmesh Kakkad and Manish Banthia have built a well-diversified portfolio which includes highly resilient large- and bluechip companies and AAA-rated debt securities.

Retail investors can consider adding this scheme to their portfolio with a horizon of at least five years.

Portfolio change (past 6 months)

New entrants	Complete exits	Increase in allocation
BPCL, DCB Bank	Alembic Pharma, Bharat Electronics	M&M Fin Serv
Kalpataru Power	Ashok Leyland, Colgate Palmolive (India)	Natco Prama Ltd
Quess corp	SBI Life Insurance, Dabur India	Oracle Fin Soft
Wheels India	Dr Reddy's Laboratories, Glaxo Smithkline	Bajaj Finance

Returns (in %)

Period	CAGR return	Balanced Advantage Fund AVG CAGR	SIP CAGR Return*
1 year	5.43	3.75	3.89
3 years	7.06	5.94	6.08
5 years	7.29	5.72	7.93

Source: Accord Fintech, compiled by ETIG Database; *since launch

Expert Take
Kaustubh Belapurkar, Director - Fund Research, Morningstar India
It is a dynamically-managed asset allocation fund. The net equity allocation is managed depending on market valuation parameters, reducing net equity exposure when markets are expensive and vice versa. The equity portion is managed in a flexi-cap style with a mix of growth and blend style stocks. The fixed income exposure is in relatively safer higher-rated instruments. The fund is a great option for investors who are looking to take graded equity exposure and are worried about volatility. It contains any potential downside in bear cycles to a large extent.