ICICI Balanced Advantage Fund Review




ICICI Balanced Advantage Fund


Dynamic Asset Allocation (Balanced)

AUM (Rs Cr)

30,900 cr (As on 30/04/2021)

Fund Manager

Mr Sankaran Naren

Mr Rajat Chandak

Mr Ihab Dalwai

Mr Dharmesh Kakkad

Mr Manish Banthia

Mrs Priyanka Khandelwal


Crisil Hybrid 50 + 50 – Moderate Index


ICICI Pru Balanced Advantage Fund


What is Icici Prudential Balanced Advantage Fund?

ICICI balanced advantage fund is a dynamic asset allocation or balanced advantage fund.

It invests in both equity and debt but in varying and flexible numbers.

It is the second largest fund it the balanced advantage fund category after HDFC Balanced Advantage Fund.

It follows an in house model based on the price to book value (P/BV) ratio.

It can move anywhere between 30-80% in equity.

For tax calculation purposes, it is considered an equity fund.


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What is a balanced fund? 

A dynamic asset allocation fund is more popularly known as a balanced advantage fund.

A balanced advantage fund is a type of hybrid fund.

It invests in debt, equity and arbitrage positions although the allocation is not fixed and can also sit on cash if the fund manager desires so.

Unlike other hybrid funds like multi asset, aggressive and conservative, a dynamic asset allocation or a balanced advantage fund does not have a fixed mandate to follow.

The fund manager can move across different asset classes based on the prevailing market conditions.

The importance of a balanced advantage fund is felt more during a bearish market phase since it can cut down its equity portion and at the same time make periodic equity purchases in the dip.

This is unlike other pure equity funds who at all times have to maintain their mandate irrespective of the market situation.

Additional reading: Click Here to read all about the various types of hybrid mutual funds


ICICI Balanced Advantage fund portfolio 

As on 30th April 2021, the fund was overweight on the following sectors:

  1. Automobile
  2. Energy
  3. Services

While it was underweight on the following sectors:

  1. Technology
  2. Financials
  3. FMCG &
  4. Healthcare

The fund has always been an actively managed and well diversified fund which can be attested by the fact that as on 30th April 2021, it held 80 stocks.

This is true for most balanced advantage funds though since they tend to be more diversified with both, sectors and stocks.

Its allocation to the various asset classes as on 30th April 2021 is as under:

Equity – 38.50% 

Debt – 26.70%

Cash - 34.80 %

The fund usually has a cyclical/value pick with respect to a particular sector which should not be very surprising considering it can sit on cash and wait for the opportune moment.

This again is a trend with most balanced advantage funds which has both its pros as well as cons.



ICICI Pru Balanced Advantage Fund
Top sectors as on 30/04/2021


ICICI Balanced Advantage Fund Nav

As tempting as it is, comparing one balanced advantage with another should be avoided at all costs.

This is because every balanced advantage will function in a manner which could be very distinct.

Therefore, it does not make any sense to compare one fund to another.

Some may sit on cash, some may not while some may have a different approach towards the debt side.

Unlike equity funds, a balanced advantage fund has less restrictions and more flexibility meaning every fund manager will manage it in a manner that she feels fit.

With a balanced advantage fund, how it does in a bull market is of less importance compared to how it performs in a bear market and that is how its nav should also be judged.

If high returns is all you focus on then a balanced advantage fund should not take your time and money.


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Taxation on ICICI Balanced Advantage Fund

For the purpose of taxation, ICICI Balanced advantage fund qualifies as an equity fund and the taxation charges applicable on it are as follows:


Long term capital gains tax better known as LTCG is applied on any equity mutual fund when the gains from an equity mutual fund which is held for more than a year is more than 1 lakh.

The LTCG rate is 10%.

Capital gains up to 1 lakh are exempt for taxes.

There is no indexation benefit when calculating LTCG.



Short term capital gains tax better known as STCG is applied on gains from an equity mutual fund which is held for 12 months or less.

The STCG rate is 15%.

There is no ceiling benefit in STCG like the 1 lakh ceiling in LTCG.

STCG is charged on from Re 1.




ICICI Balanced Advantage fund & HDFC Balanced Advantage fund

HDFC Balanced advantage is the largest fund in this category with ICICI pru balanced advantage being the second largest.

Both were recategorized in 2018 and that is where their similarities end.

ICICI pru balanced advantage is more growth driven whereas HDFC balanced advantage fund is more value driven.

One is more stable than the other whereas the other is more volatile.

These two funds are prime examples of how every fund within the balanced fund category can have a strategy of its own which is distinct from the rest.

Which is precisely why as an investor you need to overlook past returns in favour of understanding the underlying strategy when it comes to a balanced advantage fund.


Additional reading: Click Here to read our complete review of HDFC Balanced Advantage Fund

Should you invest in ICICI Balanced Advantage Fund?

ICICI Balanced Advantage can invest in both equity and debt, the exposure to which can be dynamically managed based on the prevailing market conditions.

Such funds help in doing your job of rebalancing which is necessitated by volatility which is a given with equity investing.

This should never be the only fund in your portfolio though but should rather be a part of it.

Every balanced advantage fund will a strategy of its own and that is usually based on valuation metrics like price to earnings (P/E), price to book (P/B) and dividend yield.

This is not an exhaustive list but only the usual factors are stated.

Such funds are slightly on the conservative side due to the option of cutting down their equity exposure in a rising market.

This creates an illusion that they are safer since they can up their allocation to debt which is not true since with debt you still need to be on the look out for credit and interest rate risk.

Balanced advantage funds can be considered for your initial steps into the world of equity investing but picking the one most suited for you is where the real planning comes into the picture.

For portfolio enquiriesemail us with your doubts at info@themutualfundguide.com

Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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