ICICI Prudential Mutual Fund has launched the ICICI Prudential Dynamic Asset Allocation Passive FOF, an open-ended fund of funds that will dynamically invest in passive equity- and debt-oriented schemes.
The new fund offer (NFO) opened on August 26 and will close on September 9, 2026. The minimum investment during the NFO period is ₹1,000, with additional investments allowed in multiples of ₹1.
For investors who find it difficult to decide when to increase or reduce their equity exposure, which schemes to choose or when to rebalance their portfolios, the fund offers a rules-based way of making those decisions.
The allocation between equity and debt will be guided by ICICI Prudential’s in-house Equity Valuation Index (EVI). The index takes into account price-to-earnings and price-to-book ratios, G-Sec-adjusted earnings and India’s market capitalisation relative to GDP.
As of July 31, 2026, the EVI stood at 105.2, placing it within the model’s neutral zone.
Where will the fund invest?
On the equity side, the scheme can invest across passive funds tracking different market-cap segments, sectors and themes, as well as factor-based strategies.
On the debt side, it can invest in target-maturity, constant-duration and constant-maturity index funds and exchange-traded funds (ETFs).
Decisions on the duration of the debt portfolio will take into account interest-rate trends, expectations around Reserve Bank of India policy, the yield curve and the outlook for economic growth.
Rebalancing without an immediate tax hit
One practical advantage of the structure is that rebalancing between equity and debt within the fund does not trigger a tax event for the investor each time the allocation changes.
An investor managing the two asset classes separately, by contrast, may incur a tax liability when selling units in one fund to move money into another.
Investors in the FOF itself will be taxed at their applicable slab rate if units are held for less than 24 months. Gains on units held for 24 months or more will be taxed at 12.5%.
The scheme carries a “Very High” risk rating and will be benchmarked against the CRISIL Hybrid 50+50 – Moderate Index.
It will be managed by Manan Tijoriwala, Sharmila D’Silva, Manish Banthia, Ritesh Lunawat and Nishit Patel. Investors can also use systematic investment plan (SIP), systematic withdrawal plan (SWP) and systematic transfer plan (STP) facilities.
