Stock 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.
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.
|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.
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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