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The fund has actively managed the duration of the debt portfolio during the three years; duration ranged from 1.63 years to 6.63 years.

The fund was launched in March 2004 as ICICI Prudential MIP 25 Fund. Subsequent to the reclassification of mutual funds by Securities and Exchange Board of India (Sebi), it has been renamed ICICI Prudential Regular Savings Fund. It was ranked 2 in the conservative hybrid category of CRISIL Mutual Fund Ranking (CMFR) June 2018. Rajat Chandak and Manish Banthia have been managing the fund since February 2015 and September 2013, respectively.

Investment objective

The fund’s investment objective is to generate regular income through investments predominantly in debt and money market instruments. The scheme also seeks to generate long-term capital appreciation from the portion of equity investments under the scheme.

Trailing returns

The fund has consistently outperformed the benchmark (CRISIL Hybrid 75+25 - Conservative Index) and the peers (schemes ranked under the conservative hybrid category of CRISIL Mutual Fund Ranking-June 2018) in all the trailing periods under analysis. An investment of Rs 10,000 in the fund on March 30, 2004 (inception date) would have grown at an annualised 10.11% to Rs 40,352 on September 19, 2018 vis-a-vis peers’ Rs 34,911 (9.02 % CAGR) and the benchmark’s Rs 35,034 (9.04%).

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Risk-reward matrix

The fund delivered higher average daily returns than the category and the benchmark in the past three years, but with higher volatility.

Portfolio analysis

During the past three years, the fund had average allocation of 77% to debt and money market securities, and 23% to equities. It has been flexible in managing its asset allocation, while maintaining predominant allocation to debt and money market securities. Allocation to equities ranged between 11% and 25% during this period. Equity allocation was trimmed from 25% in April 2018 to 11% in August 2018.

The fund has actively managed the duration of the debt portfolio during the three years; duration ranged from 1.63 years to 6.63 years.

The fund has been conservative in managing the credit risk exposure of the debt portfolio, with predominant allocation to sovereign and AAA equivalent debt securities during the period under analysis.

The fund had average allocation of 35% to sovereign securities and 21% to AAA and equivalent debt securities during the past three years. Exposure to sovereign securities was completely cut down to 0 in August 2018, from 43% in September 2017 and allocation to AA category & A1 rated securities raised from 14.45% to 30.61%.

By Crisil Research

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