Skip to main content

ICICI Prudential Equity Fund – Volatility Advantage

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

ICICI Prudential Volatility Advantage Fund

ICICI Pru Equity – Volatility Advantage (earlier called ICICI Pru Equity & Derivatives Fund – Volatility Advantage Plan or ICICI Pru VAP) has adeptly managed the volatile markets of the last 3 years to deliver compounded annual returns of 10.6%, better than the balanced fund category average of 6% as well as benchmark Crisil Balanced index' return of 6.6%.

Its performance has pushed it to the spotlight in recent quarters. What exactly is this fund's strategy and how different is it from balanced funds? Read on:

The fund and suitability


ICICI Pru Equity Volatility Advantage is classified as an equity-oriented balanced fund in most online portals. Yes, it seeks to hold at least 65% in equities like most other balanced funds and the rest in debt. Only, its equities need not be only cash positions. The fund will have the flexibility to hedge its equity positions with derivatives and also take on derivative positions in the index.

Simply put, the fund uses derivative hedging strategies in its equity holding. This makes it one notch less risky than normal balanced funds, especially in volatile/down markets.

But that also means that in sudden rallying markets, the fund's hedged positions, if any, may place a cap on the returns it can manage. The fund is therefore suitable for investors who are looking for returns higher than debt-oriented funds (such as MIPs) and wish to take risks lower than balanced equity funds.

The key positive about this fund is its ability to reduce risks even while being classified as an equity fund for tax purposes. That means, you can have nil capital gains tax in the fund if held for more than a year, while assuming risks that are a few notches higher than regular debt-oriented funds.

Performance


ICICI Pru Equity Volatility Advantage has an excellent track record of beating its benchmark almost all the times on a rolling one-year return basis for the last 3 years. However, over a longer period of 5 years, the fund beat its benchmark a less impressive 72% of the times.


This was because it took a good bit of hit in 2008. Its higher cash equity position at the beginning of the year did cause some damage. But it managed the market fall in 2011 much better, falling by 8.7% even as the benchmark fell by over 14%.

That said, in sharp rallying markets, a defensive position can cap returns. In 2009 for instance, the fund delivered a good 10 percentage points lower than balanced fund category-average return suggesting that its hedging strategy worked against it. But in markets such as 2012, when rallies were more predictable, the fund changed tack with ease and managed returns superior to the category.

It may be fair to position this fund between debt-oriented funds such as MIPs and balanced funds in terms of its risk-return profile.

Portfolio


ICICI Pru Equity Volatility Advantage has a portfolio of equities biased towards large-cap stocks. Net of the 3.6% exposure to derivatives, the fund held about two thirds in equities and rest in debt as of April 2013.

The fund's debt portfolio, unlike its sister fund ICICI Pru Balanced, is skewed towards short-to-medium -term maturity instruments. For instance, as of April, its debt portfolio sported an average maturity of 0.9 years compared with the Balanced fund's maturity of 5.98 years. Even while it did increase portfolio maturity compared with its holding at the beginning of 2013, it evidently preferred to keep its risks at bay by holding to shorter maturity buckets.

The fund is managed by Manish Gunwani and Manish Banthia. The fund was launched in end 2006 and was renamed twice.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...
Read more

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...
Read more

Save Tax With Mutual Funds

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       Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes ·        Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. ·        First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...
Read more

Reliance Health Total

  Reliance Life Insurance has launched Reliance Health Total, a non-linked, non-participating and non-variable health insurance plan . It provides a fixed benefit cover for hospitalisation, critical illnesses and surgeries. The customer can also make a claim for over-the-counter health-related expenses. This is a regular-pay, five-year plan that can be renewed till the age of 99. The plan comes with two options: customers can choose a higher medical reimbursement benefit or a higher sum insured. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - I...
Read more

Compared to Bank FDs, Debt Mutual Funds are more Tax-Efficient

It is a security vis-a-vis returns battle between bank fixed deposits and debt funds In the past few months, banks have been consistently increasing their rates of interest on different fixed deposits. And after the Reserve Bank of India's Annual Monetary Policy, even the saving deposit rates are up at 4 per cent. For a six-month fixed deposit, you can easily get a rate of anywhere between 6 and 7 per cent annually. However, experts feel if one is looking to invest for less than a year, debt funds could make a better choice. The reason: Liquid funds and ultra short-term funds are giving annualised returns of 8 per cent. Financial advisors suggest retail investors opt for mutual fund schemes as they are more flexible and give higher post-tax returns. Opt for fixed deposits only if you are comfortable being locked-in for the tenure as a premature exit can attract a penalty. If your main aim is to ensure liquidity, debt funds are preferable. Though a fixed deposit gives you a...
Read more
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