Feb

2020

BALANCED ADVANTAGE CATEGORY

ICICI PRU
BALANCED
ADV FUND

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 Benchmark Crisil Hybrid 35+65
Category Balanced Advantage Fund Category
Fund Start Date Dec 30, 2006
AUM Rs. 28,092 Crores (as of Feb 28, 2020)
Objective To provide capital appreciation and income distribution to the investors by
using equity derivatives strategies, arbitrage opportunities and pure equity
investments.
Returns since 10.4% p.a.
inception
Min. Investment Rs. 500
NAV (28th Feb 2020) Regular: 36.9 | Direct: 39.8

Market Cap

Ja n-09 Nov-16
Feb-20
25% 29%
9%
Nov-16
Ja n-15 1% Feb-20
Feb-12 30%
Ja n-09 25%
0%
30%
Feb-12
0%
Feb-12 Feb-20
67% 58%

Ja n-09 Ja n-15
45% 13%

Ja n-15 Nov-16
34% 67%

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Oct-11

Oct-12

Oct-15

Oct-18

Oct-19
Oct-09

Oct-10

Oct-13

Oct-14

Oct-16

Oct-17
Apr-09

Apr-10

Apr-11

Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18

Apr-19
Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20
Jul-09

Jul-10

Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Equity Debt Derivatives Cash & Cash Equivalents

Inference
Fund’s portfolio classification suggests that fund is truly a balanced advantage category fund. A balanced
fund is one which can change its allocation based on market valuations. It can invest in Equity, Debt as
well as Derivatives. On an average the category as a whole invests around 68% in Equity where fund has
around 58% only. It has higher allocation to debt at 25% as compared to category average of only 20%.
Fund has derivatives exposure of upto 9% to keep it as Equity taxation fund.

Fund Background
AUM
Fund has an AUM of Rs. 28,092 Cr as on Feb 2020
35,000
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900%

30,000

700%
25,000

500%
20,000
AUM in Rs. Cr

AUM Growth
362%

300%
15,000
120%
97%
64% 74%
45% 100%
10,000 0% 10%
-3%
34% 46%
45%
0% 14% 0% -5%

5,000 -100%
25,101

13,730

28,092
10,611

17,368

28,718
12,464

28,853

13,045
1,167

5,392

3,399
1,152

2,534

4,953

7,178

0 -300%
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-2020 Feb-2020

ICICI P ru Balanced Advantage Fund Category Avg ICICI P ru Balanced Advantage Fund % Growth Category Avg % Growth

Inference
This graph shows how AUM of ICICI Pru Balanced Advantage Fund is changing YoY. Fund had an
outstanding growth in its AUM during the year 2014-15. After which the growth rate kept falling
consistently and is now below category average. Currently fund is the second largest one in this
category, but has almost no growth in last one year which means that there is a withdrawing trend for
this fund. It is surprising to see no growth even when fund has performed well in the past.

Fund House & Fund Manager

ABSL Fund House – The Second Largest Mutual Fund House in India.
Established – 1994
Fund Start Date– Dec 30, 2006

Final Inference
Fund belongs to one of the largest and an experienced fund house. Fund was established in 2006,
therefore has spent good time in the markets. Also, it is second largest fund in the category. So for being
an old fund and having a good AUM; we give it a Green star here.

Returns
Trailing Returns
Regular Plan Trailing returns Direct Plan Trailing returns

20% 20%
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15% 15%
12%12%
11%

Returns
Returns

10% 10% 9% 8% 9%
8% 8% 8% 9%
8% 8% 8% 8% 8%
8% 7% 7%
6% 7%
6%
5% 5%

0% 0%
1 Year 3 Year 5 Year 7 Year 1 Year 3 Year 5 Year

ICICI P ru Balanced Advantage Fund Category Crisil Hybrid 35+65 ICICI P ru Balanced Advantage Fund Category Crisil Hybrid 35+65

Inference
The overall performance of this fund is above average. Fund has given very good returns in last one year.
When compared with benchmark though it falls a bit short. It has done well in rest of the years.
Therefore, an impressive trailing returns here.

Calendar Year Returns

40%
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35%
35% 33%

31%
30% 29% 29%

25%
25% 25% 24%

20% 19%

15%

11% 10% 11% 11%

10% 8% 8%
7% 8%
6%
6%
5% 3% 3%
2% 2%
0%
0%
2012 2013 2014 2015 2016 2017 2018 2019

ICICI Pru Balanced Advantage Fund Category Crisil Hybrid 35+65

Inference
Fund has outperformed category average five times (i.e. in 2012, 2013, 2015, 2018 and 2019) in last 7
years. Out of which it was ahead of benchmark as well as category average thrice and that too by a good
margin. Rest all year’s performance has not been much away from the category except in 2017.

Rolling Returns
Rolling Lowest Highest Probable Probable
Returns Returns Returns Low High
Period (CAGR) (CAGR) Returns Returns
(CAGR) (CAGR)
ICICI Pru Balanced Advantage Fund 3 Years 7.0% 24.0% 8.8% 17.8%
Category Avg 3 Years 1.2% 24.0% 7.2% 17.8%
ICICI Pru Balanced Advantage Fund 5 Years 7.7% 16.9% 11.4% 15.8%
Category Avg 5 Years 6.5% 17.8% 9.8% 15.7%
ICICI Pru Balanced Advantage Fund 7 Years 11.9% 15.0% 12.6% 13.9%
Category Avg 7 Years 10.5% 14.7% 11.4% 13.3%
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Inference
Rolling returns show a more better version of performances. We can see that fund has given very
consistent high returns as compared to category average. A very good rolling return performance.

SIP Returns
Particulars 1 Year 3 Years 5 Years 7 Years
Total Amount Invested (Rs) 120,000 360,000 600,000 840,000
Market Value of Amt Invested (Rs) 122,065 393,171 726,266 1,177,928
Scheme Returns (CAGR) 3.2% 5.8% 7.6% 9.5%
Benchmark Value (Rs) 120,978 391,992 735,420 1,182,103
Benchmark Returns (CAGR) 1.5% 5.6% 8.1% 9.6%
Category Average Returns (CAGR) -0.2% 3.8% 6.3% 9.0%
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Inference
Good: Consistently near average Trailing returns
Good Calendar performance
Excellent rolling returns
Bad: Much below average returns in 2014 and 2017
Near benchmark trailing returns.
Overall, we give it 2 Green and 1 Yellow star here.

Fund Manager
Inference
Fund is led by famous Fund Manager – Mr Sankaran Naren. He is the CIO of ICICI Pru Mutual Fund. Mr
Naren is B. Tech from IIT & MBA from IIM. He is an old time with ICICI Pru and is working here since
2004. Mr Naren is managing lot of major Equity funds of ICICI Pru and is heading the Equity portfolio of
this fund since 2017.
Mr. Rajat Chandak is the co-fund manager of this fund along with Sankaran Naren. Mr Chandak started
his career with ICICI Prudential AMC in May 2008 and has been with the AMC since then. He is B.Com &
MBA. He has an overall industry experience of 11 years.
CA Ihab Dalwai and CA Dharmesh Kakkad are also co-managing the equity portfolio from Jan 2018 and
Sep 2018 respectively.
CA Manish Banthia another fund manager who has had a long association with ICICI AMC is managing
the Debt portfolio of this fund since Nov 2009. He has an industry experience of more than 16 years now
and manages debt portfolio for more than 20 schemes for ICICI.
Overall, the fund is managed by experienced fund managers and has also performed well under them.
Mr. Naren the CIO of ICICI Pru AMC himself being at the helm. An only thing to worry is that there are
too many fund managers managing this fund at this point. It does give an edge of expertise in every
aspect but this move could backfire and might burden up fund expenses also. Still, we give it a Green
star here for now.

Expense Ratio

Direct Plan Regular Plan

2.0 2.8
1.8
2.6
1.6 1.4 1.3 2.4
1.4 1.2 1.2 2.4 2.3
1.2 1.1
2.2
1.3
1.0 2.2
1.1 2.0
0.8
0.9 0.9 2.0 1.9
0.6 0.8
0.4 1.8 1.7
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0.2 www.MFYadnya.in
Feb - Feb - Feb - Feb - Feb - 1.6
2016 2017 2018 2019 2020 Feb - 2016 Feb - 2017 Feb - 2018 Feb - 2019 Feb - 2020
ICICI Pru Balanced Advantage Fund Average ICICI Pru Balanced Advantage Fund Av erage

Inference
An expense ratio is the amount companies charge investors to manage the fund. The expense ratio of
this fund in Direct plan is more than category average and in Regular plan it is lower than average. As
regular plan has an additional expense of distributor contribution a regular plan expense ratio should be
more than direct plan ratio. In this funds case there is not much difference between both plans. When
looked upon with a more than average direct plan ratio, it indicates that fund is charging additional
expense ratio from the investors here.
More than 4 fund managers managing this fund including two star fund managers might also be one of
the reasons for such high ratio. But even then, as fund belongs to one of the largest fund house in India
definitely a lower ratio is expected. Therefore, we give it a Red star here.

Portfolio Diversification
Sector Diversification
1% 2% 2% 2% 2% 5%
9% 7% 5% 5%
10% 5%

5% 9% 10%
12% 9%
8%

13% 11% 10% 10%

12% 11%
7% 11%
11% 10%
12%
12%
12% 11% 11%

16% 11%

37% 35%
32% 35%
28%
23%

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Financial Technology FMCG Energy Automobiles Healthcare Communication

Inference
Balanced advantage funds can change their allocation based on market valuations. It is arguable that
Financial sector stocks are mostly over-valued, but at the same time the fact that it is a comparatively
stable performing sector cannot be denied. Fund has 35% allocation in Financial sector which is near
average. The next best sector according to fund manager is Technology which has 11% allocation and is
fourth best choice of the category. Apart from that fund also has regular allocations to cyclical sectors
like Healthcare and Automobiles too. Overall, fund has an average diversification.

Top 20 Stocks
Feb Feb Feb Feb Feb Feb
Company Name 2015 2016 2017 2018 2019 2020
 HDFC Bank Ltd. 3.6 5.5 4.4 4.0 4.7 4.7
ICICI Bank Ltd. 4.0 2.1 2.6 1.8 2.0 3.7
Housing Development Finance
Corpn ltd 2.1 - 1.0 2.1 4.0 3.2
Bharti Airtel ltd 1.3 1.6 1.3 1.3 1.0 3.1
Infosys Ltd. 3.2 3.5 2.8 2.8 3.6 2.7
Reliance Industries Ltd. 2.6 1.0 1.2 1.9 2.2 2.5
Axis Bank Ltd. 0.5 1.6 1.8 1.7 3.2 2.2
State Bank of India 1.5 0.3 3.7 1.5 2.0 2.1
Kotak Mahindra Bank Ltd. - 0.7 0.6 0.6 2.3 2.0
Motherson Sumi Systems Ltd. 1.0 2.0 2.8 1.8 1.7 2.0
ITC Ltd. 2.9 3.1 0.9 1.7 2.4 1.8
National Thermal Power Corp ltd 1.8 1.0 1.5 1.1 1.3 1.8
Larsen & Toubro Ltd. 1.3 1.3 1.5 1.0 1.9 1.8
Hindustan Unilever Ltd. - - 2.5 1.7 1.4 1.6
HCL Technologies Ltd. 2.4 2.6 2.1 1.6 1.6 1.6
Tata Consultancy Services Ltd. - - 0.3 - 1.2 1.4
TVS Motor Company Ltd. - 0.8 0.7 1.1 1.2 1.3
Tech Mahindra Ltd. 2.3 2.0 2.0 1.6 1.8 1.3
Bajaj Finserv Ltd. 1.5 1.5 2.5 0.9 1.2 1.3
Interglobe Aviation Ltd. - - - 1.1 0.7 1.2
Total Percentage 31.9 30.5 35.9 31.5 41.5 43.4
Total No of Stocks in Portfolio 64 67 79 100 105 105
Inference
Fund has 105 stocks in its equity portfolio. With so many stocks in the portfolio, an allocation of 43.4%
to top 20 stocks which usually is good might appear higher. Funds concentration to Financial sector is
seen in top 5 stocks where 3 of them are from Financial sector only. Fund manager appears to follow a
pretty long term strategy in equity portfolio with 19 of top 20 stocks being in the portfolio from last 4
years. Overall, a good equity portfolio.

Top 10 Papers
Hou Sep- Oct- Nov- Dec- Jan- Feb-
Company Name
se 2019 2019 2019 2019 2020 2020
G-
07.57% GOI - 17-Jun-2033 0.3 0.3 0.4 2.3 3.3 3.6
Sec
Priv
Axis Bank Ltd. SR-26 8.75% 2.0 2.0 2.0 2.0 2.0 2.1
ate
Priv
ICICI Bank Ltd. SR- DMR17AT 09.20% 1.8 1.8 1.8 1.8 1.8 1.9
ate
Priv
Axis Bank Ltd. SR-28 8.75% 1.4 1.4 1.4 1.4 1.4 1.4
ate
Priv
ICICI Bank Ltd. SR-DMR18 9.15% 1.0 1.0 1.0 1.0 0.9 1.0
ate
 Power Finance Corpn. Ltd. SR-172
PSU 0.9 0.9 0.9 0.9 0.9 0.9
07.74% (29-Jan-28)
State Bank of India SR-II 09.37% PSU 0.9 0.9 0.9 0.9 0.9 0.9
Embassy Office Parks REIT. SR-II (03- Priv
- - 0.8 0.8 0.8 0.8
Jun-22) ate
HDFC Credila Financial Services Pvt Ltd. Priv
0.6 0.6 0.6 0.6 0.6 0.6
8.25% (25-Nov-21) ate
Priv
Indusind Bank Ltd. 09.50% 0.6 0.6 0.6 0.6 0.6 0.6
ate
Total 9.4 9.4 10.4 12.1 13.2 13.8
Total No. Papers 71 69 70 71 68 65
Inference
In case of Debt portfolio allocation, among the top 10 securities, 7 are Private companies’ papers, while
one is a Treasury Bill. Most of the private papers are highly rated and also belong to quality private
banks like Axis and ICICI.

Final Inference
Equity – Fund has near average Sectoral diversification. It plays safe with highest allocation to Financial
sector. Its stock portfolio though less diversified is delivering good performance.
Debt – Debt portfolio of the fund is well diversified and has more allocation to high quality private
companies.
Overall, we give Green star here

Risk Measures
Equity Risk Measures
Beta Alpha
1.3 8.0
1.2 7.0
6.0
1.1
5.0
1.0 4.0
0.9 3.0
0.8 2.0
0.7 1.0
0.0
0.6
-1.0
0.5 -2.0
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0.4 -3.0

ICICI Pru Balanced Advantage Fund Cat egory ICICI Pru Balanced Advantage Fund Cat egory
 Standard Deviation P E Ratio
50
15% www.MFYadnya.in www.MFYadnya.in
45
40
13%
35
11% 30
25
9%
20
7% 15
10
5%

ICICI Pru Balanced Advantage Fund Category Crisil Hybrid 35+65 ICICI P ru Balanced Advantage Fund Average

Inference
Looking at Standard Deviation & portfolio Beta (measure of Risk), fund is clearly a low risk fund.
Funds risk profile along with category average fell drastically at the beginning of last year. Looking
at alpha (which measures risk adjusted returns) funds performance was below average during last
year but has now moved ahead of category average. Which indicates a good performance in recent
times. Fund has a slightly above average PE ratio.
Overall, fund is a low risk and moderately high return fund currently.

Debt Risk Measures

a) Portfolio – Rating
 4% 4% 2% 2%
6%
11% 4%
8% 15% 16%

35% 34%
35% 26%
32%

10%

87%

58% 56%
53% 51%
49%

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1%
Mar 2015 Sep 2015 Mar 2016 Sep 2016 Mar 2017 Sep 2017 Mar 2018 Sep 2018 Mar 2019 Sep 2019 Oct 2019 Nov 2019 Dec 2019 Jan 2020 Feb 2020

AA/A2 AAA/A1+ SOV A/A+

b) Average Maturity & Modified Duration

Average Maturity Modified Duration
4
3.3 2.4
3.1 2.2

2
2.0
Years

Years

1.7 1.3
2 1.7
2.2
1.4

1.0 0.8

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0 0
Feb - 2018 Feb - 2019 Feb - 2020 Feb - 2018 Feb - 2019 Feb - 2020

ICICI Pru Balanced Advantage Fund Av erage ICICI Pru Balanced Advantage Fund Av erage

c) YTM
 YTM (%)
10.0
9.3
9.5
9.0
8.2
8.5
8.7
8.0
7.6
7.5 7.9

7.0 7.1
6.5
6.0
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5.5
Feb - 2018 Feb - 2019 Feb - 2020

ICICI Pru Balanced Advantage Fund Av erage

Inference
Funds debt portfolio was a very Sovereign Bond heavy one in mid-2017 when it had almost 90%
allocation to it. From there on it has consistently reduced SOV allocation to just 16% now. Currently fund
has more allocation to second highest rated corporate bonds. The portfolio consists of highly rated
financial sector institutions. YTM of the fund is above average. Therefore, an above average
performance can be expected from debt portfolio of the fund going forward.
While reviewing a debt part of mutual fund among all other parameters, the Average maturity and
Modified duration of the fund are important ones. It helps us understand the Interest rate risk fund
takes. More the Modified duration, more the sensitivity to interest rate movement. As seen above fund
keeps higher Interest rate risk than category average.

Final Inference
Overall, funds debt portfolio has a slightly more risk. On the other hand Equity portfolio is risk averse
and has lower risk than peers. Overall, it is a low risk and moderately high returns fund and therefore it
deserves 2 Green and 1 Yellow star here.

Portfolio - Asset Type

 0.4% 0.4%

15.3%

Corporate Debt
Government Securities
PTC & Securitized Debt
Treasury Bills

83.9%

Summary
• Fund is second largest fund in the category
• Fund is more balanced as the category suggests with 58% in Equity, 25% in Debt and 9% in
Derivatives
• Fund has given mostly above average returns
• Funds sector allocation is well diversified with a focus on Financial Sector
• Funds debt portfolio has high allocation to AA rated private papers
• Funds debt portfolio has a slightly above average risk
• Equity portfolio has lower risk and moderately high returns

Data Source –
Accord MF, Fund Monthly Factsheets, AMFI Data, Yadnya Research

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Financial advisor for final recommendations.
Mutual Funds are subject to market risk and read the offer document in detail before investing.
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