Skip to main content

Mutual Fund Review: ICICI Prudential Dynamic

When the markets are falling, ICICI Prudential Dynamic is the fund to go with

 

The very nature of this fund ensures that it will have excellent defending capabilities during market downturns. Its market strategy causes it to reduce exposure to equities when the stock market is high and get fully invested when valuations are low as the risk return trade off is better and opportunity is greater.

 

The fund manager has the discretion to go fully (100%) into equity or liquidate his holdings to zilch (0%). Over the past few years, his equity holdings dropped to a low of 76 per cent. And, true to mandate, that was not in 2008 when the market collapsed but in July 2009 when the rally began to gain in momentum.

 

Besides the asset allocation, this portfolio stands out with regard to its defensive nature. "As the valuation of a theme expands and enters into a bubble territory, we tend to be underweight in it which helps the fund mitigate downside risks well," explains Naren. That would explain why he is underweight on Domestic Consumption. He is also underweight on interest rate cyclicals given the interest rate and inflation scenario. But he is betting on Energy, which he finds to be a more conservative avenue than Commodities. The fund manager has tremendous flexibility not only to dynamically shift between asset classes but even between market caps. And this leeway he uses to the hilt. It started as a large-cap fund but joined the mid-cap rally in 2003 to once again take on a large cap tilt from mid-2006 onwards. Despite mid caps rallying, its large cap exposure currently stands at 69 per cent.

Frankly, the fund's performance has not always been impressive. When compared with its benchmark, it has done suitable well for itself by hitting a rough patch in 2007 and being a fairly average performer in 2009. When compared to its category average, its track record is spotty. It has undoubtedly had a few good years, but stood out in 2008 by limiting its fall to just 45 per cent (category average: -54%). But this is exactly what one should expect from such a fund. "Over a five-year period, this conservative fund has a better potential for outperformance than other funds. While it may demonstrate moderate performance during market rallies, due to great downside protection it neither will correct significantly, thereby averaging the returns over the long term," says Naren.

 


Popular posts from this blog

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now