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Prudential ICICI Balanced

Dhirendra Kumar

Prudential ICICI Balanced, an open-end balanced fund, was launched in October 1999. The fund declared its maiden dividend of 10 per cent in March 2000. Entry into the fund is at a load of 1.75 per cent, while exit is on a no-load basis.

Launched amid a flurry of balanced fund launches, Prudential Balanced was bestowed with Rs 200 crore corpus in a rising market. With a charter that enables a minimum 51 per cent allocation to equity, the fund parked a predominant 65 per cent of the corpus in equities.

Within this, the fund held an average 42 per cent exposure to technology, media and telecom stocks in the first quarter of 2000. The fund had investments in momentum plays and mid cap holdings in its technology investments such as HFCL, Zee, Aftek and Mastek. The rest of the portfolio is diversified across healthcare, FMCG and automobiles. Within the debt component, the fund has primarily held on to a liquid portfolio of AAA papers. Not much information though is available on the maturity profile of debt holdings.

FUND BASICS   Objective    Size (Cr)    NAV: 04/05/2001    Exit Price    Entry Price    Total Return   Balanced   238.96   8.56   8.56   8.71   -9.40%

With the TMT rally in the earlier part of the year, and the momentum stocks gaining in particular, the equity exposure went to a high of 75 per cent. With this, the fund gained smartly, posting a 68 per cent simple return in less than a year, with the NAV touching a high of Rs 16.8. However, with the markets on a downward trail ever since, the fund has shed all the gains and is currently ruling below par at Rs 8.56 with a return of 9.40 per cent.

BENCHMARK COMPARISONS (%) (04/05/2001)      1M    3M    6M    1Yr    3Yr   Fund   4.52   -11.66   -10.46   -14.91   -   VR Bal Index   0.97   -6.88   1.29   -3.45   6.87   Obj. Avg.   2.59   -12.60   -9.85   -14.04   8.10

The falling markets have restored the balance in the debt equity break up. Equity exposure of the fund has averaged around 56 per cent of the corpus in the last quarter. Further, within the equity portfolio, the fund has pared its predominant stance towards the TMT counters, which account for 20 per cent of the corpus in the last quarter. Instead, the fund has sought to broad base the portfolio across quality holdings in economy and healthcare sector.

Prudential ICICI Balanced fund has struck a delicate balance between debt and equity mix, and holds a diversified portfolio in its equity basket. While the fund may take a while to stabilise, it should provide long-term performance if the re-aligned stance continues.

Top Equity Holdings (31/03/2001)      Value (Cr)    % of Assets   Reliance Ind.   10.44   4.40   Grasim Ind.   8.75   3.69   Dr. Reddy's Lab.   8.68   3.66   Hindalco Ind.   7.89   3.33   MTNL   6.57   2.77   Digital Equipment   6.25   2.63   BHEL   5.88   2.48   Tata Power Co   5.48   2.31   Larsen & Toubro   5.00   2.11   Sun Pharmaceutical   4.73   1.99   H C L Technologies   4.73   1.99

   

Top Debt Holdings (31/03/2001)      Value (Cr)    % of Assets   HPCL   20.02   8.44   Reliance Ind.   15.23   6.42   IDBI   15.15   6.38   IL&FS   10.29   4.34

Source: Value Research

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