This Hybrid Fund generated 8.6% returns in last 5 calendar years (Consistently)

ICICI Prudential Asset Allocator FoF - Last 5 years - Consistent returnsStock markets are volatile in the last 6-9 months. Returns from equity funds would fluctuate with such volatility as they invest in direct equity. Debt funds has been generating low returns in the last 1 to 1.5 years. However, there is one and only one hybrid mutual fund scheme that generated over 8.5% consistently every year. In fact, this fund that generated 8.6% to 16.6% returns every year consistently. In this article we would talk about ICICI Prudential Asset Allocator FoF, a dynamic asset allocation fund that generated over 8.6% returns every year in the last 5 years.

Also Read: Which are the Top 10 Mutual Funds with highest SIP returns in last 10 years

About ICICI Prudential Asset Allocator FoF

The investment objective of the scheme is to generate capital appreciation primarily from a portfolio of equity, debt, and gold schemes accessed through the diversified investment styles of underlying schemes.

This fund does not invest directly in equity or debt instruments or gold. However, it would invest in another mutual fund scheme that invests equity or gold or debt instruments. Hence this is called fund of funds (FoF).

Why are we talking about ICICI Prudential Asset Allocator FoF?

There are over 185 odd hybrid mutual fund schemes. These hybrid funds are further sub categorized as aggressive hybrid funds, conservative hybrid funds, balanced funds, equity savings funds, arbitrage funds, dynamic asset allocation funds and multi asset allocation funds.

These funds have generated returns between -18% (minus) to 80% in the last 5 calendar years (Jan to Dec). However, there is only one single hybrid fund that generated over 8.5% consistently every calendar year i.e. 2017, 2018, 2019, 2020  and 2021.

Top Holdings of ICICI Prudential Asset Allocator FoF

Currently it invests 48% in debt, 31% in equity, 11% in gold and 10% holds in cash.

Here are the top equity holdings of this fund.

Company % Assets
ICICI Pru Large & Mid Cap 6.3
ICICI Pru Value Discovery Fund 6.2
ICICI Pru Technology 5.1
ICICI Pru Banking and Financial Services 3.4
ICICI Pru Bharat Consumption Fund 2.7
ICICI Pru Infrastructure Direct 2.6
ICICI Pru Business Cycle Fund 1.6
ICICI Pru Dividend Yield Equity 1.3
ICICI Pru P.H.D Fund 1.2
ICICI Pru Exports and Services 1.0
ICICI Pru India Opportunities Fund 0.9
ICICI Pru FMCG 0.6
ICICI Pru US Bluechip Equity 0.5

Here are the top debt holdings of this fund.

Company 1Y Range % Assets
ICICI Pru Floating Interest Direct-G 9.14 – 21.77 21.49
ICICI Pru Savings Direct -G 9.23 – 23.08 13.77
ICICI Pru All Seasons Bond Direct-G 8.15 – 11.41 8.77
ICICI Pru Ultra Short Term Direct-G 0.00 – 13.30 3.64
ICICI Pru Gilt Direct-G 1.12 – 8.38 1.73
ICICI Pru Medium Term Bond Direct-G 0.00 – 1.71 1.68
ICICI Pru Bond Direct-G 0.00 – 5.99 0.62
ICICI Pru Credit Risk Direct-G 0.00 – 0.58 0.52

ICICI Prudential Asset Allocator FoF – Performance and Risk Metrics

This fund has a low beta of 0.73. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a high alpha of 3.45. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Here are the returns by calendar year (Jan to Dec) in last 5 years.

2017 – 15.3%

2018 – 8.6% (Lowest)

2019 – 9.7%

2020 – 13.4%

2021 – 16.6% (Highest)

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 62% of the times
  • 8% to 12% returns – 16% of the times
  • < 8% returns – 22% of the times
  • Negative returns – zero times

From a 5 year rolling return perspective, this fund generated:

  • Over 12% returns – 48% of the times
  • 8% to 12% returns – 45% of the times
  • < 8% returns – 7% of the times
  • Negative returns – Zero times

It has a low expense ratio of 0.07% as the underlying funds also have expenses being charged.

This fund benchmark is CRISIL Hybrid 50+50 Moderate Index.

This fund generated 12% annualized returns in last 3 years, 10% annualized returns in last 5 years and 12% annualized return since inception.

Funds AUM is Rs 15,824 Crores.

Value Research rates this fund as 4 Star now. However, such ratings can change in the future.

Also Read: List of 10 Dividend Yield Mutual Funds to invest in 2022

ICICI Prudential Asset Allocator FoF – Should you invest?

This is a dynamic asset allocation fund that invests in equity, debt and gold asset classes. It does not invest directly in these asset classes, however it would invest through other ICICI mutual fund schemes. This is one and only one hybrid mutual fund that generated over 8.6% returns in the last 5 calendar years consistently. Investors who would like to diversify their investment portfolio with investment in multi assets (equity, debt and gold) with moderate returns, can invest in this mutual fund scheme.

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Suresh KP

6 comments

  • Kalyan

    Suresh…thx as always..I assume that since this FoF, ICICI Prudential Asset Allocator FoF will be taxed as any other DEBT fund….that is 3 years for the long term and LTCG will be indexation and at 20%,,,,pl clarify

      • Dinesh

        Sureshji,
        Thanks as always a good article.

        The funds like HDFC Balanced Advantage Fund – IDCW, gives constantly monthly dividend. if investors choose to invest in Growth option this fund, will it mean the NAV grows every month by dividend amount (so growth of 8%)?

        • Dinesh, One should not opt for dividend option unless you want regular income thru mutual funds. In this case, NAV might not grow like other growth funds as returns are distributed to you by way of dividend. If you still want to invest for regular income, invest in income funds, but withdraw through SWP.

  • Savaee

    Hi Suresh Sir, please suggest a good mutual fund primarily invest in gold apart from ETF.
    Please suggest good liquid and Short term fund.

    • Savee, If your primary motive is to invest in gold, you can invest in Sovereign gold bonds. If you still want to invest in gold mutual funds, you can opt for Quantum gold savings fund or SBI gold fund which has low expense ratio

      Regd liquid fund, you can invest in any of the liquid funds.

      Regd Short term, check for ICICI Pru ultra short term fund or HDFC Pru ultra short term fund

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