ICICI Prudential Asset Allocator Fund Review 2023 | Invest in ICICI Prudential Asset Allocator Fund

ZFunds

16 Mar 202304:16

Summary

TLDRThe video discusses the ICICI Prudential All-Capped Equity Fund of Funds, which invests in various schemes rather than directly in equity and debt. It falls under the hybrid mutual fund category and offers diversification benefits for stable returns. The fund has been delivering an average return of 11.83% since its inception in 2003 and has a significant allocation in ICICI Prudential Savings Fund and other schemes. The fund is open-ended with growth and income distribution options available. It is suitable for investors with a three-year investment horizon and carries tax implications similar to debt funds.

Takeaways

😀 The video discusses the ICICI Prudential Equity and Debt Fund of Funds, which is a hybrid mutual fund that does not invest directly in equity or debt.
💼 The fund manager invests in different defensive schemes, categorizing it under hybrid multi-fund schemes, specifically the multi-asset allocation category.
📊 To achieve diversification, the fund manager can invest in a minimum of three different asset classes, including equity, debt, and gold, with at least 10% allocation in each.
📈 The fund has been performing well since its inception in December 2003, providing an online average return of 11.83%.
🏆 The fund has allocated its assets in 21 schemes, with the highest allocation in the ICICI Prudential Savings Fund at 25.83%.
💼 The top 10 scheme holdings account for 84.04% of the fund's assets, indicating a concentrated investment approach.
🏦 The fund's average credit rating is triple A, with the majority of holdings in government securities at 33.24%.
💹 The fund is open-ended, offering both growth and income distribution options, with a minimum investment amount of ₹5000.
💰 The fund's expense ratio as of December 31, 2022, was 1.4%, which is a factor to consider when evaluating the cost of investing.
💡 The video advises considering this fund for a long-term investment horizon of three years or more and to review the portfolio regularly to ensure it aligns with investment goals.

Q & A

What is the name of the fund discussed in the video?
-The fund discussed in the video is named ICICI Prudential, an Asset Allocation Fund of Funds.
What type of investments does the fund manager make in this fund?
-The fund manager invests in different defensive schemes rather than directly in equity and debt.
In which category does this fund fall under?
-This fund falls under the category of Hybrid Mutual Funds.
What is the minimum investment amount required to invest in this fund?
-The minimum investment amount required is ₹5000.
What is the minimum SIP amount if one prefers to invest through SIP?
-The minimum SIP amount is ₹1000.
What are the options available for capital distribution in this open-ended scheme?
-The options available for capital distribution in this open-ended scheme are growth and income distribution cum capital redemption options.
What is the average credit rating of the securities allocated in this fund?
-The average credit rating of the securities allocated in this fund is Triple A.
What is the percentage of government securities in the fund's holdings?
-The percentage of government securities in the fund's holdings is 33.24%.
What is the exit load if units are sold within 365 days?
-If units are sold within 365 days, a 1% exit load will be applicable.
What is the applicable tax rate for this fund?
-The applicable tax rate for this fund is the death tax rate, which includes short-term capital gain tax if units are redeemed within 3 years, and long-term capital gain tax if units are held for more than 3 years with a deduction rate of 20%.
How can one get assistance if they want to review their portfolio to see if this fund is suitable for them?
-One can get assistance by sending a WhatsApp message to 72177 4624, and the experts will help review the portfolio.

Outlines

00:00

📈 Introduction to ICICI Prudential Allocated Fund of Funds

The video discusses the ICICI Prudential Allocated Fund of Funds, a hybrid mutual fund that does not directly invest in equity, debt, or gold but rather allocates funds across different schemes managed by the fund manager. The fund falls under the multi-asset allocation category and aims to provide diversification benefits, potentially leading to stable returns and lower portfolio volatility. The video provides an overview of the fund's inception, performance, and investment strategy.

🏦 Fund Performance and Allocation Details

This section delves into the performance history of the ICICI Prudential Allocated Fund, highlighting its inception in December 2003 and an average return of 11.83% since then. The fund's allocation is spread across 21 schemes, with the top three being the ICICI Prudential Savings Fund, ICICI Prudential Floating Rate Fund, and ICICI Prudential Gold D-Term Deposit Fund. The fund's top 10 holdings account for 84.04% of its assets, and it has an average credit rating of Triple A, indicating high-quality investments.

💼 Investment Options and Minimum Requirements

The video script outlines the investment options available for the ICICI Prudential Allocated Fund, including the open-ended nature of the scheme with growth and income distribution options. It specifies the minimum investment amount of ₹5000 and the minimum additional investment amount of ₹1000. The script also mentions the redemption load applicable if units are sold within 365 days, which is 1% for redemptions exceeding 10% of the units held.

💹 Tax Implications for Investors

The final paragraph addresses the tax implications for investors in the ICICI Prudential Allocated Fund. It explains that since the fund invests a maximum portion in debt, the applicable tax rates would be those of capital gains tax on debt. Investors would be subject to short-term capital gains tax if they sell their units within three years, while long-term capital gains tax at a rate of 20% would apply if units are held for over three years.

Mindmap

Keywords

💡Fund of Funds

A fund of funds is a type of investment fund that invests in other funds rather than investing directly in securities. In the context of the video, the 'ICICI Prudential All Seasons Fund of Funds' is an example of this, where the fund manager invests in different schemes to achieve diversification and potentially stable returns.

💡Hybrid Mutual Funds

Hybrid mutual funds are a category of mutual funds that invest in a mix of equity, debt, and other asset classes to balance risk and return. The video discusses how the 'All Seasons Fund' falls under this category, indicating a diversified investment approach.

💡Asset Allocation

Asset allocation refers to the process of dividing investments across different asset classes. The video script mentions that the fund manager does not directly invest in equity and debt but uses different schemes for asset allocation, which is crucial for diversification.

💡Equity

Equity in the context of mutual funds refers to the portion of the fund that is invested in shares or stocks of companies. The script specifies that the 'All Seasons Fund' has a significant allocation to equity, which is part of its strategy to achieve growth.

💡Debt

Debt, in the context of the video, refers to the portion of the fund invested in fixed-income securities like bonds or loans. The fund's allocation to gold and debt helps in achieving a balance between risk and return.

💡Gold

Gold is considered a safe-haven asset and is often included in a fund's portfolio to hedge against inflation and economic uncertainty. The video mentions that the fund has an allocation to gold, which contributes to its diversification strategy.

💡Credit Rating

Credit rating is an evaluation of the creditworthiness of an entity, indicating its ability to repay debt. The script discusses the average credit rating of the securities in the fund, which is important for assessing the risk associated with the fund's investments.

💡Government Securities

Government securities are debt instruments issued by the government, often considered low-risk investments. The video mentions that the fund has a significant holding in government securities, which contributes to the stability of the fund's portfolio.

💡Return on Investment (ROI)

Return on investment is the profit or loss derived from investing in a particular vehicle, relative to the amount invested. The script provides historical ROI figures for the 'All Seasons Fund', which is a key indicator of the fund's performance.

💡Exit Load

Exit load is a fee charged by a mutual fund when an investor sells units within a certain period. The video explains the conditions under which an exit load is applicable for the fund, which is important for understanding the costs associated with selling units.

💡Tax Implications

Tax implications refer to the taxes that must be paid on investment earnings. The video discusses the tax rates applicable to the fund, highlighting the difference between short-term and long-term capital gains tax, which is crucial for investors to consider.

💡Investment Horizon

Investment horizon is the length of time an investor plans to hold an investment. The video suggests that the fund is suitable for those with an investment horizon of three years or more, indicating the fund's long-term investment strategy.

Highlights

The video discusses the ICICI Prudential Equity, a fund of funds that does not invest directly in equity or debt.

Fund managers invest in different defensive schemes, categorizing the fund as a hybrid mutual fund.

Hybrid mutual funds consist of six categories, with this fund falling under the multi-asset allocation category.

Fund managers can invest in a minimum of three classes as per guidelines, including equity, debt, and gold.

A minimum of 10% allocation is required across these three classes for diversification benefits.

The ICICI Prudential Equity Fund is an open-ended fund with a maximum allocation in security.

The fund has been incepted since December 2003, providing an average return of 11.83%.

The fund has outperformed the benchmark in various periods, including 12.5% in 3 years, 11.04% in 5 years, and 12.45% annually.

The fund is allocated across 21 schemes, with the highest allocation in the ICICI Prudential Savings Fund at 25.83%.

The top 10 scheme holdings account for 84.04% of the fund's portfolio.

The fund's average credit rating is Triple A, with the highest holding in government securities at 33.24%.

The fund offers both growth and income distribution options, with capital value and dividend roll options available.

The fund's assets as of December 31, 2022, were 180.16 billion, with an expense ratio of 1.4%.

The minimum investment amount for lump sum investment is ₹5,000, and for SIP, the minimum is ₹1,000.

There is a 1% exit load if more than 10% of units are sold within 365 days.

No exit load is applicable if units are sold after 365 days from the purchase date.

Tax rates applicable to the fund are the same as those for death, including short-term capital gains tax if units are sold within three years.

Long-term capital gains tax at a rate of 20% applies if units are held for more than three years.

The fund should be considered for investment if the investment horizon is at least three years.

For portfolio review and expert advice, viewers are encouraged to message on WhatsApp at the provided number.

The video ends with a reminder to like, subscribe to the channel, and follow for more financial insights.