The ICICI Prudential Multi-Asset Active FoF will open for subscription on June 30 and close on July 14.
The open-ended scheme aims to manage allocation between different asset classes depending on market conditions, valuations and macroeconomic factors.
Instead of relying on one asset class, the fund will shift exposure across equity-oriented schemes, debt-oriented schemes and Gold ETFs/Silver ETFs.
For retail investors, the key idea behind the scheme is diversification, reducing dependence on the performance of a single market segment.
Where will the new fund invest in?
The scheme will invest predominantly in units of active equity mutual fund schemes, active debt mutual fund schemes and gold or silver exchange-traded funds (ETFs).
The allocation will be actively managed based on the attractiveness of different asset classes at a given point in time.
The broad allocation range of the fund is:
• 30-80 per cent in active equity-oriented schemes
• 10-60 per cent in active debt-oriented schemes
• 10-30 per cent in Gold ETFs and/or Silver ETFs
However, the actual allocation may change depending on market conditions and the investment framework followed by the fund house. The asset management company (AMC) said the allocation will be guided by its proprietary valuation and macroeconomic models.
Tax treatment and investment details
Investors who remain invested for 24 months or more will qualify for long-term capital gains tax treatment, according to the fund house.
Other key details of the scheme are:
• Minimum investment amount: Rs 1,000
• Plans available: Direct Plan and Regular Plan
• Benchmark: 55 per cent Nifty 200 TRI + 35 per cent NIFTY Composite Debt Index + 7 per cent Domestic Price of Gold + 3 per cent Domestic Price of Silver
The fund will be managed by Dharmesh Kakkad, Manish Banthia, Akhil Kakkar, Sharmila D’silva and Gaurav Chikane.
How the fund strategy will work
The scheme follows an active allocation approach. This means the fund manager can increase or reduce exposure to different asset classes based on changing market conditions.
The investment approach combines three broad objectives:
• Equity exposure for potential long-term wealth creation
• Debt exposure for relatively stable income generation
• Gold and silver exposure for diversification and possible inflation protection
The AMC said the scheme will use its internal frameworks to evaluate asset class attractiveness rather than attempting to predict which asset class will deliver the highest returns next.
Why multi-asset investing is gaining attention
Different asset classes usually perform differently during various economic cycles. Equity markets may perform strongly during periods of economic growth, while debt investments may provide stability when market volatility rises. Gold often acts as a diversification tool during periods of inflation concerns or geopolitical uncertainty.
The fund house highlighted that the leadership among equity, debt and gold has changed frequently over different market cycles, making asset allocation an important part of long-term investing.
A multi-asset approach attempts to balance these cycles by spreading investments across multiple categories rather than depending only on equity markets.
What should investors keep in mind?
A multi-asset fund can help investors get diversification through a single investment product, but it does not remove market risk. The performance of the scheme will depend on the underlying equity funds, debt funds, gold ETFs and silver ETFs in which it invests.
Since this is a fund of funds structure, investors should also note that expenses of the FoF as well as expenses of the underlying schemes may apply.
Investors should evaluate the product based on their financial goals, investment horizon and risk appetite before investing. Mutual fund investments remain subject to market risks, and investors should read scheme-related documents carefully.