Last fortnight we had focused on the performances of an assortment of equity funds across categories. This fortnight, we shall shift the focus to Hybrid Equity Funds that are better suited to mid-investment life-cycle stage investors. Featured here are a time-tested Hybrid Aggressive Fund, two Balanced Advantage Funds with contrasting styles and an Equity Savings Fund whose management responsibility has now been thrust on an incoming fund manager with a good track record.
ICICI Prudential Equity and Debt Fund is a Hybrid Aggressive fund with an AUM of `18,967 crore. The current Asset allocation mix is nearly 75% in Equity and 25% in Debt and Cash equivalents. Its top equity holdings are in the Energy, Financial and Communication sectors. The debt holdings include Government Securities and Debentures with AA credit rating. The performance of this fund over a 1-year, 3-year and 5-year time period is 46.07%, 20.55% and 15.56% respectively.
Edelweiss Balanced Advantage Fund is a hybrid fund that comes under the sub-category of Dynamic Asset Allocation with an AUM of `6,271 crore. The current Asset allocation mix is nearly 45% in pure Equity, 35% in Arbitrage and 20% in Debt and Cash equivalents. Its top equity holdings are in the Financial, Technology and Energy sectors. The debt holdings include Government Securities, Commercial Paper and Debenture with A1+ and AAA credit rating. The performance of this fund over a 1-year, 3-year and 5-year time period is 21.66%, 16.70% and 14.37% respectively.
ICICI Prudential Balanced Advantage Fund is a Hybrid fund that comes under the sub-category Dynamic Asset Allocation with an AUM of `37,348 crore. The current Asset allocation mix is nearly 34% in pure Equity 31% In Arbitrage and 35% in Debt and Cash equivalents. Its top equity holdings are in the Financial, Energy and Automobile sectors. The debt holdings include Government Securities and Treasury Bills. The performance of this fund over a 1-year, 3-year and 5-year time period is 16.94%, 13.33% and 11.52% respectively.
L&T Equity Savings Fund is a Hybrid fund that comes under the sub-category Equity Savings with an AUM of `150 Crore. The current Asset allocation mix is nearly 20% in Equity, 45% in Arbitrage and 35% in Debt and Cash equivalents. Its top equity holdings are in the Financial and Technology sectors. The debt holdings include Government Securities and Debentures. The performance of this fund over a 1-year, 3-year and 5-year time period is 17.74%, 10.34% and 8.41% respectively.
While these hybrid funds carry lower risk than pure equity funds and hence deliver lower returns in a bull market of the kind witnessed since April 2020, their real utility is seen in a sharply down-trending market where their inherent structure cushions investors from going into a free-fall. Hence, this category definitely merits the attention of investors and especially from the mid-investment life-cycle stage group, while constructing their portfolios.
Ashok Kumar
Head of LKW-India. He can be reached at ceolotus@hotmail.com