Most mutual funds shine during bull markets, but only a handful manage to outperform consistently across different market cycles. One such 5-star-rated multi-asset fund has delivered annualised returns of over 16% across the last 3, 5, and 10 years, making it one of the standout performers in its category.
Classified as hybrid schemes by SEBI, multi-asset allocation funds invest across at least three asset classes. Regulations require these funds to maintain a minimum 10% allocation in each asset class.
The fund in focus is ICICI Prudential Multi Asset Fund – Direct Plan, a multi-asset allocation scheme that invests across equity, debt, and gold. The diversified portfolio helps reduce dependence on a single asset class while seeking long-term wealth creation.
Before we discuss the fund’s performance across different time frames, let’s take a look at the performance of multi-asset funds as a subcategory under the hybrid segment.
Multi-asset allocation funds, which invest across equity, debt, and commodities, are designed to provide diversification and reduce dependence on a single asset class. The category has delivered steady returns across different time periods. Below is the fund’s performance across 1, 3, 5, and 10 years, as per Value Research.
1-year return: 10.09%
3-year annualised return: 15.75%
5-year annualised return: 13.17%
10-year annualised return: 10.71%
Now, take a closer look at ICICI Prudential Multi Asset Fund returns and how much wealth it could have created for investors over the years.
ICICI Prudential Multi Asset Fund returns
Here’s how ICICI Prudential Multi Asset Fund has performed across different time horizons.
| Fund name | 3-year return in % | 5-year return in % | 7 years returns in % | 10-year returns in % |
| ICICI Pru Multi Asset Direct | 17.21 | 17.78 | 17.34 | 16.61 |
| Category average return | 16.82 | 14.28 | 15.19 | 11.55 |
| Source: Value Research |
Other key details of ICICI Prudential Multi Asset Fund
With an AUM (Assets Under Management) of Rs 83,547 Cr, this hybrid mutual fund was introduced on January 1, 2013. The scheme tracks benchmark NIFTY 200 TRI.
As per data from Value Research, the fund has generated 16.15% since its inception. 63.1% of the fund’s assets are allocated to equity, 13.23% to debt, 10.09% to commodities, 1.33% to real estate, and 12.24% to cash and cash equivalents.
Compared to the category average of 16.16%, the fund has produced an average annual return of 16.85%. This suggests that during the past three years, investors have received higher returns than the typical multi-asset fund.
Top 10 holdings: HDFC Bank, ICICI Bank, Bajaj Finserv, Axis Bank, Infosys, Interglobe Aviation, ITC, Reliance Ind, Maruti Suzuki, and SBI Cards.
Top 5 sector holdings: Financial, Consumer Discretionary, Industrials, Technology, and Consumer Staples.
Expense ratio: 0.52% (competitive and low-to-moderate expense ratio)
Risk profile: Because of its substantial exposure to equity and market-linked assets, the fund has a very high risk profile.
The fund’s returns have been somewhat less volatile than the typical fund in its category, as seen by its standard deviation of 8.87%, which is marginally lower than the category average of 9.12%. Better risk-adjusted performance is shown by the fund’s Sharpe Ratio of 1.24, which is higher than the category average of 1.14.
The fund’s Sortino Ratio of 1.42 exceeds the 1.35 category average. This means the fund has managed downside risk effectively while generating attractive returns for the investors.
Investor suitability: Suitable for long-term investors who can tolerate equity-market volatility and are seeking diversified exposure across multiple asset classes with a relatively efficient risk-return profile.
Who should invest in hybrid funds?
Hybrid funds can be suitable for investors who want a balance between the growth potential of equities and the relative stability of debt investments. By investing across asset classes, these funds aim to reduce volatility while still offering opportunities for long-term wealth creation.
Hybrid funds provide exposure to multiple asset classes such as equities, debt, and sometimes gold through a single investment, helping diversify risk without requiring investors to manage separate portfolios. Those who find pure equity funds too volatile may prefer hybrid funds, as the debt component can help reduce portfolio fluctuations during market downturns.
Word of caution
While strong historical returns can be encouraging, investors should remember that past performance does not guarantee future results. Before investing, assess your risk tolerance, financial goals, and investment horizon.
Instead of choosing a fund solely based on performance or ratings, they should consider factors such as portfolio quality, consistency of performance, risk metrics, and diversification. Equity mutual funds are generally better suited for long-term investors who can remain invested through the market cycle.
While hybrid mutual funds can offer a balance between growth and stability by investing across multiple asset classes, investors should note that these funds are highly risky. The equity component can still expose the fund to market volatility, while debt investments may be affected by interest rate movements and credit risks. Investors should assess their risk appetite, investment horizon, and financial goals before investing.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
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