An SIP of Rs 20,000 every month in this fund from January 2013 would’ve led to an investment of Rs 30 lakh, the current value of which would be over Rs 1 crore in just over 12 years.
Investment in an aggressive hybrid mutual fund is suitable for those investors who do not want to take a lot of risk but also want to take advantage of the growth in the equity markets. One such fund is the ICICI Prudential Equity & Debt Fund, which is an actively managed and the fund manager takes a call on the amount of equity and debt, as well as the large-cap, mid-cap and small-cap allocation of the fund. The fund tends to do well when the equity market does well, but also provides a cushion (due to the debt component) when the equity market falls.
If one had consistently invested Rs 20,000 in this fund since January 2013, one’s investment would be worth over one crore in 2025.
Standard Deviation Of Less Than 10 Per Cent
The standard deviation of the ICICI Prudential Equity & Debt Fund is 9.88 per cent, which is much lower than that of its peers, the benchmark, and the Nifty 50. According to Rohan Goyal Investment Research Analyst, MIRA Money, the fund has a Sharpe Ratio of 1.35 per cent, which is used to evaluate a mutual fund’s risk-adjusted performance.
“Currently, the fund has 72 per cent equity, 22 per cent debt, 2 per cent real estate and 4 per cent cash. In equity, it currently has 90 per cent in largecaps, 8 per cent in midcaps and 2 per cent in smallcaps across 89 stocks,” Goyal said.
3-Year, 5-Year CAGR
The fund’s current 3-year CAGR (Compound Annual Growth Rate) is 21.79 per cent, and its 5-year CAGR is 26.67 per cent.
An SIP of Rs 20,000 every month in this fund from January 2013 would’ve led to an investment of Rs 30 lakh, the current value of which would be over Rs 1 crore in just over 12 years. The profit would be around Rs 70 lakh. The portfolio’s XIRR (Extended Internal Rate of Return) is 18.28 per cent.
Step-Up SIP
With just a 10 per cent step-up every year, this number could be achieved two years faster, i.e., in just over ten years. Step-up SIP (Systematic Investment Plan) in mutual funds is a simple strategy of periodically increasing the investment amount after a set interval.
An SIP of Rs 20,000 every month with a 10 per cent annual step-up in this fund from January 2013 would’ve led to an investment of Rs 55 lakh into this fund, the current value of which would be over Rs 1.5 crores. The profit of which would be around Rs 1 crore.