ICICI Prudential Multi-Asset Fund has reached a significant milestone, completing 21 years of successful wealth creation for investors. Over this period, the fund has demonstrated its potential to generate substantial returns, turning a substantial sum of Rs. 10 lakh into a remarkable Rs. 5.49 crore.
Dominant AUM and Investment Approach: With an impressive AUM (Asset Under Management) of Rs. 24,060.99 crore, the fund accounts for nearly 57% of the total AUM in the multi-asset allocation category, as of September 30, 2023, according to Value Research data.
ICICI Prudential Multi-Asset Fund employs an open-ended investment approach, strategically allocating assets in equity, debt, exchange-traded commodity derivatives, units of Gold ETFs, units of REITs & InvITs, and preference shares. This diversified investment strategy aims to deliver consistent returns over an extended investment horizon. The fund ensures that at least 10% of its assets are distributed across three or more asset classes, further enhancing its portfolio yield. To optimize yields, the fund may also invest in covered call options.
Impressive Growth and Benchmark Comparison: An investment in this fund over 21 years has been exceptionally rewarding, as it significantly outperforms its benchmark. While the fund multiplied an initial investment of Rs. 10 lakh into Rs. 5.49 crore, a similar investment in the benchmark would have yielded around Rs. 2.57 crore, equivalent to a CAGR of 16%.
SIP Investment Success: Investors utilizing a systematic investment plan (SIP) strategy have also benefited from this fund. A monthly SIP of Rs. 10,000 since the fund’s inception would have translated into a total investment of Rs. 25.2 lakh, growing to Rs. 2.1 crore by September 30, 2023, with an impressive CAGR of 17.5%. In contrast, a similar investment in the fund’s benchmark would have resulted in a CAGR of 13.7%.
Expert Insights: Nimesh Shah, MD & CEO of ICICI Prudential AMC, emphasized the significance of judicious asset allocation across various asset classes for long-term investor success. He highlighted that the fund benefits from the expertise of fund managers from diverse asset classes, working collaboratively to optimize allocation.
S Naren, ED & CIO, ICICI Prudential AMC, underlined the advantages of diversifying investments across different asset classes to manage portfolio volatility and enhance risk-adjusted returns. This approach aligns with the ever-changing dynamics of top-performing asset classes and ensures that the portfolio can capitalize on the potential gains each asset class offers.
Conclusion: ICICI Prudential Multi-Asset Fund’s remarkable journey of wealth creation and its commitment to diversified asset allocation have made it a formidable investment choice for long-term wealth building.
