ICICI Prudential MF has launched its Balanced Hybrid Fund which will allocate broadly in a genuinely balanced 50-50 ratio across debt and equity.
If you want stability in asset allocation (which dynamic funds don’t promise) and your debt allocation to get a 2 year LTCG of 12.5%, this new balanced hybrid fund is a good option to consider.
With no allocations necessary towards arbitrage, expect the non-equity component to be entirely managed akin to an actively managed all seasons bond fund.
The shorter end of the curve is where Manish sees the best opportunities as also in corporate papers going down from AAA to slightly lower rated ones as well in a credit environment which he sees as conducive.
Fund strategy will be dynamic – duration can well swing from low to high in perhaps a year’s time as Manish expects RBI to start rate hikes a few quarters down the road. The debt allocation in short will aim to generate alpha through active management.
Roshan is cautiously optimistic on equity markets. He notes that while our Government has done everything it could, we have to be mindful that global growth is slowing down and that will have a bearing on our market.
Private sector banks are a favourite for him as well as some consumption themed stocks.
IT services companies have reached levels now where reverse DCFs suggest a rather undemanding 3-4% annual growth requirement. Roshan will be cherry picking in this space in true contrarian style.