ICICI Prudential Equity - Volatility Advantage Fund

ICICI Prudential Equity - Volatility Advantage Fund is managed by an experienced manager Manish Gunwani and Manish Banthia. This fund invests in a diversified blend of Large and Mid-cap stocks and the allocation is decided on a tactical basis, rather than any predefined ratio. This is a good fund to hold on.

Where does ICICI Prudential Equity - Volatility Advantage Fund invest your money?

ICICI Prudential Equity - Volatility Advantage Fund is a balanced which invests your money in both equity securities and debt securities. It has more than 63.63% exposure to equity, 29.94% to debt and 6.43% exposure to cash and cash equivalents. Its equity portion has large cap bias which means most of your money will be invested in stocks of large sized companies. ICICI Prudential Equity - Volatility Advantage Fund has 59.81% exposure to large sized companies and 27.13% exposure to mid sized companies and 9.70 % exposure to small sized companies.

It currently holds close to 6.43% of its assets in cash and equivalents such as T-bills, banker’s acceptance and money market instruments.

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 Equity - Volatility Advantage Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in December 2006, your value of investments would be around Rs 1.72 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.49 lakhs. The performance has been similar to that of the other large cap mutual funds. The fund has been giving 8.42% returns for those who have stayed invested for the past 5 years.

Assume you had invested Rs 10,000 every month in it through SIP for the past 5 years today you would have around Rs 8.50 lakhs.

How will ICICI Prudential Equity - Volatility Advantage Fund 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 9% 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 mutual funds to give you returns in excess of 14%. 

We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. You can make ICICI Prudential Equity - Volatility Advantage Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Do not make the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Our recommendation for existing investment
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 six months than an exit load of 3% is charged while if units are sold after 6 months but within 18 months from the date of allotment than an exit load of 2% is charged. No exit load applies for units withdrawn post 18 months. Expense ratio of ICICI Prudential Equity - Volatility Advantage Fund is 2.77%. 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?

The returns in an equity mutual fund are absolutely tax free, provided you do not withdraw within 1 year.

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