New ICICI Prudential Fund seeks stability through equity-debt allocation

ICICI Prudential Mutual Fund has launched a new balanced hybrid scheme that seeks to combine equity and debt investments within a single actively managed portfolio, reflecting growing demand among investors for products that aim to balance return potential with lower volatility.

The new offering, ICICI Prudential Balanced Hybrid Fund, opened for subscription on June 30 and will close on July 14.

Structured as an open-ended balanced hybrid scheme, the fund will invest only in equity, debt and money market instruments, without using arbitrage strategies.

Under the scheme’s allocation framework, 40-60% of assets will be invested in equities and equity-related instruments, while 40-60% will be allocated to debt and money market securities. The structure places it within the balanced hybrid category defined by the Securities and Exchange Board of India (SEBI), distinguishing it from aggressive hybrid funds that maintain a higher equity exposure and conservative hybrid funds that are tilted more heavily toward debt.

The launch comes at a time when investors are looking for diversified products that can potentially participate in equity market upside while also cushioning volatility through fixed income exposure.

Market participants have seen renewed interest in hybrid strategies amid fluctuating interest-rate expectations, elevated equity valuations in select pockets and uncertainty around global growth trends.

According to the fund house, the equity portion of the portfolio will follow a mix of top-down and bottom-up stock selection. The strategy will consider macroeconomic indicators such as GDP growth, inflation, interest rates and currency movements, alongside company-specific factors including profitability, cash flows and business competitiveness. The equity portfolio is expected to invest across sectors and market capitalisations.

On the debt side, the scheme will invest across duration and credit categories, including government securities and high-rated instruments.

The debt allocation will be actively managed based on the fund manager’s outlook on interest rates, credit spreads and broader economic conditions. The approach combines accrual strategies intended to generate relatively stable income with tactical duration management.

The fund house said the portfolio allocation between equity and debt would be reviewed periodically depending on valuations, earnings trends and bond yields. The scheme will be benchmarked against the CRISIL Hybrid 50+50 Moderate Index.

The fund will be managed by Roshan Chutkey, Manish Banthia and Akhil Kakkar. The minimum investment amount has been set at ₹500.

Hybrid mutual funds have gained traction in recent years as retail participation in financial markets has expanded and investors seek professionally managed asset allocation solutions rather than maintaining separate equity and debt portfolios on their own.