ICICI Prudential Multi-Asset Fund Review: Suitable for new investors?

Published: May 5, 2019 at 11:11 am

Last Updated on

This is a review of ICICI Prudential Multi-Asset Fund. We explain why the low volatility of this fund makes it a good choice for new investors. Prior to the SEBI categorization rules kicked in, this was known as ICICI Dynamic Plan fund. This was classified by the AMC as an “open-ended diversified flexi-cap opportunities fund”.

Dynamic Plan fund could increase allocation to debt (cash) + derivatives when the equity market became overvalued to reduce volatility, what ICICI MF refers to as buy low and sell high strategy. However, the fund always remained an equity fund with regard to taxation by maintaining 65% exposure to equity.

Since  2010, ICIC Dynamic Plan (& its sister fund, ICICI Balanced advantage) have been managed by using a Price to Book Value model (pdf download). The AMC reference for this file is here.

ICICI Prudential Multi-Asset Fund Review: Suitable for beginners?

Investment Strategy of ICICI Prudential Multi-Asset Fund

The investment strategy of ICICI Multi-asset Fund continues to be similar to that of ICICI Dynamic Fund. The gist is shown in this screenshot from the above-mentioned pdf file.

Investment Strategy of ICICI Prudential Multi-Asset Fund is similar to ICICI Dynamic FundWhen the PB ratio is high, it indicates an overvalued market and fund would reduce equity exposure. When the PB ratio is low, it indicates an undervalued market and the equity exposure in the fund can increase up to 80% This is how the equity exposure has changed in the past (source above pdf file).

Equity exposure as a function of NIfty PBChanges in scheme mandate

To fall in line with SEBI rules, the AMC changed ICICI Dynamic fund to ICICI Multi-asset fund. A multi-asset fund should have, at all times 10% of equity, 10% of gold and 10% of bonds. It first announced that equity exposure can vary from 10% to 80% in ICICI Multi-asset.

However, considering the significant AUM in the fund, to assuage concerns over the tax status, from 1st April 2019, the fund will now ensure 65% to 80% in stocks and arbitrage opportunities. This was a needless double change, but that is how it is.

Officially, the PB/V model is not mentioned and all we have is (above link). This was the case with Dynamic Plan too.

Join our 1300+ Facebook Group on Portfolio Management! Losing sleep over the markt crash? Don't! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

The actual percentage of investment in other asset classes will be decided after considering the prevailing market conditions, the macroeconomic environment (including interest rates and inflation), the performance of the corporate sector, the equity markets and general liquidity and other considerations in the economy and markets.

Analysis & Summary

This is the 90-day rolling risk of ICICI Multi-asset fund since May 28th 2018 (after the change). It has a fantastic track record of beating the Nifty in terms of risk and return but that is no longer relevant as the asset allocation has changed.

Notice that red line is a lot more “steadier” than the white one. The multi-asset allocation (10% to gold + 10% to bonds minimum) plus the fund management is responsible for this.

It may or may not be possible for the fund to beat Nifty 50 going forward but the lower risk is pretty much guaranteed. There are two layers of it: The multi-asset allocation plus the active management. The latter is necessary to try and beat its benchmark, but this also can increase the risk.

70% Nifty 50 Index + 20% Nifty Composite Debt Index + 10% LBMA AM Fixing Prices

Therefore considering its excellent track record, its new asset allocation, mandate to remain an equity fund, I believe this is a good choice for new investors (young and old) scared of market volatility with reasonable return expectations.

My investments

my investment in ICICI multi-asset fund

I am invested in this fund since Jan 2011. The consolidated XIRR as on date (regular plan + direct plan) is 13.3%. What you see above is the direct plan investment evolution. About 27% of the equity exposure for my son’s future needs goals is in this fund. All these (and much more) can be obtained from the freefincal mutual fund and financial goal tracker. As many may be aware by now, I prefer funds that do not provide stellar returns and then slump down. This has given my steady but unspectacular returns in the past and I expect it to do the same.

Do share if you found this useful
Join our 1300+ Facebook Group on Portfolio Management! Do not lose sleep over your bleeding portfolio: Learn how to reduce fear, doubt and uncertainty while investing for financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication.Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingThis book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel


This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when traveling, how traveling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download) 

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.


  1. hdfc index sensex and nifty bees gave same returns from 2014 till 2018 also for 1, 3 and 5 years..except 2016 the abv mentioned hdfc and nifty gave 3.5% n 3.97 whereas this fund gave 13.3% also 1 year both HDFC index…niftybees gave 12 & 11.2 this fund gave only around 4pct. So i feel HDFC sensex index and nifty bees are better than this fund………we do not know, in future how this fund will behave ..but definitely both hdfc index and nifty bees will fare better..source morning star.in (returns took from them)

    1. MR pattu, can you suggesst to invest on NIFTY BEES (ETF) (and) OR HDFC INDEX SENSEX FUND is better or icici pru multi asset fund alone

    2. Last 5+ years Equity markets (Nifty or Sensex) has not fallen and has been rising higher, So the index fund returns look attractive, one bear market (more than 15% fall in a year) will prove the point Pattu is making. This fund will protect the steep downside and give returns within a range which are slightly better than FD returns and with lesser tax outgoings than debt.

  2. Hi pattu ji.. I just started investing so I don’t have much knowledge but after watching your videos and reading your blog i have got some basic knowledge about investing. So, thank you for that and i want a suggestion.. i want to invest in a aggressive hybrid fund as core of my portfolio because of it’s good return with lower risk then nifty. My choice was icici pru equity debt fund and hdfc hybrid equity fund but these two have a very high AUM and it’s increasing at a good pace, in future it might be difficult for the fund manager to manage such a high amount in the time of crisis . So, should I go ahead and invest in icici pru equity debt fund without worrying or should a consider a different fund like tata hybrid and reliance hybrid or any other fund you could suggest. I am very confused so please guide me.

Leave a Reply

Your email address will not be published. Required fields are marked *