ICICI Prudential Multi Asset Fund completes 22 years with a distinguished track record of delivering over 21.5% CAGR over this period – a remarkable performance for a hybrid fund.
What gives Ihab – who has been managing this fund for the last 7 years – more satisfaction is that it has delivered superior risk adjusted returns by participating in upsides and protecting to a good extent during drawdown phases in the market.
The fund’s commodities exposure is currently around 12%,with about 5.6% in gold a slightly lower position in silver and smaller exposures to other commodities. Gold exposure has been pared as US interest rates started hardening on election results announcement. Gold does best in a declining US interest rate environment.
Net equity at 49% is among the lowest it has been, reflecting a cautious view on markets and valuations.
Within the equity portfolio, Ihab has been re-orienting the portfolio by taking profits in value stocks and building positions in high quality stocks. He sees quality outperforming over the next couple of years and is positioning the portfolio accordingly.
Earnings slowdown may not be structural for three reasons: (1) large portion of the fall in earnings is commodity businesses which did extremely well last year but are now getting impacted by softer global prices (2) Government spending – which was muted in 1HY 24-25 due to general elections, is likely to be stepped up in 2HY, and (3) bunching up of auspicious dates for weddings into 2HY this year meant muted wedding season in1HY and likely very active wedding season in 2HY. Wedding spending is a big part of discretionary consumption.