Question

Discuss the strength and weakness of ICICI Prudential Mutual fund

Answer 1

ICICI Prudential Mutual Fund strength=

1. This scheme provides a convenience of diversification in form of a single docket of mutual fund. An investor thus need not go through the hassle of analyzing and selecting a bouquet of funds.

2. A calculated combination of debt and equity components makes the funds less vulnerable to market volatility. The equity components of the fund are aimed at generating capital appreciation and their debt components serve as securities to shield the investment from unforeseen market corrections.

3. It seeks to provide investors an opportunity to benefit out of market volatility.

ICICI Prudential Mutual Fund weakness=

1. While it might seem that ICICI Prudential Balanced Advantage Fund is virtually risk free, it is not entirely the case. Balanced funds have their own share of risk. While in case of a direct investment across a number of stocks and debt instruments, one can relocate the resources among different funds as diversification for tax planning or wealth creation.

2.This industry has had a patchy track record in India. ICICI prudential mutual fund in India has delivered overall returns far below the cost of capital for more than a decade,
The industry’s negative returns are no surprise, since most Indian private life insurers have chased volume by building large sales forces with significant fixed cost infrastructure and who focus on selling low-margin ULIPs.