Expert Speak | Mr. S Naren | ICICI Prudential Asset Allocator Fund (FOF)

Summary

The Indian market is thriving due to strong macroeconomics, earnings growth, and a supportive banking system. Despite high valuations, debt and gold present attractive investment opportunities. ICSA's multi-asset fund offers a strategic mix of equities, debt, and gold, adjusting allocations based on market conditions. This approach, which includes sector and thematic funds, provides long-term investors with a convenient one-stop solution for asset diversification, aligning with ICSA's belief in the power of asset allocation for successful investing.

Takeaways

• 📈 The Indian Market is performing well due to good macroeconomics, earnings growth, and a supportive banking system.
• 📊 Current market valuations are high in terms of P/E, P/B, and market cap to GDP ratios.
• 💼 Debt is considered an attractive asset class despite low investor interest in debt mutual funds.
• 🌟 Gold is highlighted as an interesting asset class for investment opportunities.
• 🤑 The IA credential asset allocator under fund is presented as an interesting investment strategy given the high market valuations.
• 🔄 This strategy allows for dynamic allocation between equity, debt, and gold based on market conditions.
• 📉 In 2020, the strategy increased equity allocation significantly when markets corrected.
• 📚 The addition of gold to the scheme is seen as a strategic move for a well-rounded asset allocation.
• 🌐 The scheme benefits from the expertise of ICSA Mutual Fund's investment in various sector and thematic funds.
• 🔄 The scheme is designed to adjust equity allocation in response to market corrections or time corrections.
• 💡 It offers a one-stop solution for long-term investors looking to invest in equity, debt, and gold without the need to shift between different schemes or asset classes.

Q & A

What has contributed to the Indian Market's strong performance?

The Indian Market has been doing extremely well due to good macroeconomic conditions, strong earnings growth, and a supportive banking system and corporate sector.

Why are current market valuations considered high?

Market valuations are high as they are expanding and are at elevated levels in terms of price to earnings, price to book, and market cap to GDP ratios.

Why is debt considered an attractive asset class currently?

Debt is seen as an attractive asset class, although investors have not been investing much in debt mutual funds.

What role does gold play in the investment strategy discussed?

Gold is considered an interesting asset class and has been added to the investment strategy as it is deemed an important part of asset allocation.

What is the IA credential asset allocator fund?

The IA credential asset allocator fund is a strategy that combines equity schemes, debt schemes, and gold in one product, allowing for dynamic asset allocation based on market conditions.

How did the asset allocation strategy perform in 2020?

In 2020, when markets corrected, the strategy was able to significantly increase the equity allocation in the scheme.

What is the current equity component of the scheme given high market valuations?

Given high market valuations, the equity component of the scheme has come down substantially.

How does the scheme benefit from investing in different equity and debt schemes?

The scheme benefits from the entire investment expertise available in ICSA Mutual Fund, allowing for investment in different sector funds and thematic funds.

What is the advantage of this investment strategy in a high valuation market?

The strategy is advantageous in a high valuation market as it can add to equity if the markets correct, or at a later point if they time correct, providing flexibility for long-term investment.

Why is this product recommended for long-term investors?

This product is recommended for long-term investors as it offers a one-fund solution for investing in equity, debt, and gold without the need to shift between different schemes or asset classes.

What is the importance of asset allocation according to ICSA Mutual Fund?

ICSA Mutual Fund is a big believer in asset allocation as one of the best ways to create a good long-term investing journey.