ICICI Prudential Balanced Plan

ICICI Prudential Balanced Plan is a balanced mutual fund. This fund is managed by Yogesh Bhatt and Avnish Jain. This is a good fund for your medium term needs. If you hold units in this fund you may stay put but keep a close watch on performance. 

Where does ICICI Prudential Balanced Plan invest your money?

ICICI Prudential Balanced Plan is an equity oriented hybrid fund which invests your money in both equity securities and debt securities. It has approximately 68.54% exposure to equity and 34.02% exposure to debt. Its equity portion has multi cap exposure. This means a good part of your money will be invested in stocks of large, medium and small sized companies. Large cap stocks are more stable but mid cap stocks are not avoided due to prospects of bumper returns. ICICI Prudential Balanced Plan has 65.17% exposure to large cap companies, 25.02% exposure to mid size companies and 9.81% exposure to small size companies.

The rest of the portfolio is allocated to corporate debentures, cash and cash equivalents.

Suitable for what?

The following needs if occurring between 3 and 5 years:

  • Child's Education
  • Marriage
  • Home Purchase
Not suitable for what?
  • Long term needs
  • Creation of wealth
How has ICICI Prudential Balanced Plan performed in the past?

If you had invested Rs 1 lakh when the fund was launched at Nov 1999, your value of investments would be around Rs 5.63 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.41 lakhs. The performance has been similar to the other equity oriented hybrid mutual funds. The fund has been giving at around 7.23% every year for those who stayed invested for 5 years.

Assume you had invested Rs 10,000 every month in ICICI Prudential Balanced Plan through SIP from the last five years today you would have around Rs 8.43 lakhs.

How will ICICI Prudential Balanced Plan perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 8% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. 

So if you expect the economy to grow at 8% then you can expect top performing equity mutual funds to give you returns in excess of 12%. Debt securities are expected to give anywhere between 0.5%-3% higher returns than Fixed Deposits.

How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. You can make ICICI Prudential Balanced Fund as a part of your portfolio that is focused to achieve any goals expected between 3 and 5 years.

Our recommendation for fresh investment
Our recommendation for existing investment
When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially so if it is an SIP. Do not follow news channel and other experts to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

How frequently you need to monitor the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What are the charges applicable?

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of ICICI Prudential Balanced Plan is 2.92%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.  

What are the tax implications?

Returns on equity oriented hybrid funds are absolutely tax-free provided you do not withdraw within a year of buying the units. ICICI Prudential Balanced Plan does not qualify for sec 80C ELSS benefits.

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