The 22,000 cr AuM ICICI Pru Asset Allocator Fund (FoF) has got back its tax-mojo with the recent Budget allowing FoFs a level playing field on LTCG (2 yr holding, 12.5% tax). This makes it a tax efficient way to harness all that I Pru MF has on offer on asset class calls, sector and cap-size calls within equity and duration calls within debt – all in one single fund.
Amar says AAF is different from multi asset funds as it does not come with any constraints on minimum exposure to each asset class. It can go 100 to 0 in all the 3 asset classes – equity, debt and gold. For tax purposes, it will however retain more than 35% in a combination of equity and gold.
AAF’s model-based allocation currently has 30% in equity funds, 61% in debt funds and 8% in a gold fund. Funds selected within each asset class are all from I Pru’s range and reflect the current calls of the fund house on sectors, cap-sizes, duration and other factors.
Amar points out that with over 60% in debt funds, actively managed across the I Pru range, AAF gives HNI investors a very tax efficient way to complete their debt allocations in their overall portfolio.
Amar sees AAF growing from 22,000 cr AuM to the 50,000crmark over the next 18 months. This is part of a larger initiative at the fund house level to popularize a range of fund of fund products, each designed to offer unique solutions to diverse investor needs.
ICICI Pru MF has consistently championed the cause of creating investor centric solutions - from BAF to MAF and now AAF. Expect to see more such efforts in this direction from this champion of investor centric solutions.