If you are an investor looking to deploy fresh investments, then hybrid fund route can be an optimal way to ride out the volatile phase while creating wealth over the long-term. By blending diverse asset classes within a single portfolio, hybrid funds offer the best of many worlds. Hybrid funds provide a much-needed diversified investment option for retail investors.
Over the past several months’ market experts have been advocating hybrid funds to investors looking to deploy fresh funds into equities. They are of the view that despite India’s robust macroeconomic indicators, the current market valuations are not cheap. Given the elevated valuations, one should exercise caution and acknowledge potential risks.
The beauty of hybrid strategies is that it holds the potential to cater to a wide variety of investors, spanning across varied risk appetites, financial goals and investment horizons. Over the years, one of the leading names in the hybrid space has been ICICI Prudential Mutual Fund, creating a niche with its timely asset allocation calls. Across categories, its offerings have emerged as the top performers when it comes to wealth creation.
| Fund Name | Type | AUM (In Rs. Crs) |
Asset Allocation | 3 year CAGR | Value of Rs.1 lakh invested | 5 year CAGR | Value of Rs.1 lakh invested | Since Inception | Value of Rs. 1 lakh invested |
| ICICI Pru Equity & Debt Fund | Aggressive Hybrid | 34,733 | 65-80% Equity | 25.88% | 1,99,589 | 20.7% | 2,56,307 | 15.54% | 34,48,100 |
| ICICI Pru Balanced Advantage Fund | Balanced Advantage | 56,709 | 30-80% Equity | 13.49% | 1,46,225 | 12.8% | 1,82,987 | 11.40% | 6,50,700 |
| ICICI Pru Multi Asset Fund | Multi Asset | 39,535 | 10-80% Equity | 24.69% | 1,94,001 | 19.6% | 2,45,473 | 21.45% | 65,42,711 |
| ICICI Pru Equity Savings Fund | Equity Savings | 10,118 | 15-50% Equity | 8.27% | 1,26,937 | 8.03% | 1,47,174 | 7.82% | 2,03,100 |
Data as on April 30, 2024. Source: Factsheet
Category – Aggressive Hybrid
This category scheme invests at least 65% in equities and the remaining 20-35% in debt. This is suitable for investors with a relatively higher risk appetite. ICICI Prudential Equity & Debt Fund, a consistent performer in this category has delivered an impressive 25.88% CAGR in 3-year period and 20.69% CAGR in 5-year period, beating most of its peers, category average and benchmark. A lump sum investment of Rs. 1 lakh at the time of inception (November 03, 1999), as of April 30, 2024, would be approximately worth Rs. 34.4 lakh i.e. a CAGR of 15.54%
Category – Balanced Advantage
If you want dynamic asset allocation, the 17-year old ICICI Prudential Balanced Advantage Fund (BAF) is an excellent long-term performer. The fund is considered a pioneer in this category and is known to take a counter cyclical thus enabling to buy low and sell high. This category is suitable for investors with a moderate risk appetite.
Having tactically calibrated its equity-debt allocation as per market conditions over various market cycles, the fund has delivered a 13.49% CAGR in 3-year period and 12.83% in 5-year period, bringing in a fair share of return stability amid volatile markets. A lump sum investment of Rs. 1 lakh at the time of inception (December 30, 2006), as of April 30, 2024, would be approximately worth Rs.6.5 lakh i.e. a CAGR of 11.40%.
Category – Multi Asset
This category provides a mix of equity, debt, gold/silver, REITs, InvITs etc., all within a single fund. As these asset classes have very little correlation with each other, a mix of these asset classes provides optimal diversification. The biggest and oldest fund here is ICICI Prudential Multi-Asset Fund. The fund has generated a 24.69% CAGR in 3-year period and 19.65% CAGR in 5-year period, beating peers, category and benchmark. A lump sum investment of Rs. 1 lakh at the time of inception (October 31, 2002), as of April 30, 2024, would be approximately worth Rs.65.42 lakh i.e. a CAGR of 21.45%.
Category – Equity Savings
For those preferring less risk, this category offering can be considered. In the equity portion, the funds use derivatives, thus lowering the risk profile of the exposure. Such an offering seeks to generate better-than debt, but less than equity returns for investors. Here too, ICICI Prudential equity Savings Fund is a good option given its consistent track record. Over a 3-year period, it has given a delivered a CAGR of 8.27% and a CAGR of 8.03% CAGR over a 5-year period. A lump sum investment of Rs. 1 lakh at the time of inception (December 05, 2014), as of April 30, 2024, would be approximately worth Rs.2.03 lakh i.e. a CAGR of 7.82%.
Given the stellar investment experience delivered across timeframe with reduced volatility, ICICI Prudential Mutual Fund hybrid offerings have emerged as a go-to option among investors and distributors alike.
