A New Fund That Dynamically Shifts Between Equity and Debt Based on Market Conditions..!

ICICI Prudential Dynamic Asset Allocation Passive Fund of Fund

 

R. Venkatesh, Founder, GuruRam Financial Services Pvt. Ltd.

Ph: 96770 25125, ARN 265132

 

With the objective of dynamically shifting investments between equity and debt based on changing market conditions, ICICI Prudential Mutual Fund has launched the ICICI Prudential Dynamic Asset Allocation Passive Fund of Fund, an open-ended fund of funds scheme.

The NFO period of the new fund will remain open until September 9, 2026.

 

Equity and Debt Investment Through a Single Scheme

 

This is not a scheme that directly invests in individual stocks. Instead, it invests in units of various passive equity and debt mutual fund schemes and therefore falls under the Fund of Funds category.

 

The key objective is to dynamically allocate investments between equity and debt depending on market valuations and the interest-rate environment. On the equity side, the fund can invest in passive schemes based on market capitalisation, sectors, themes and various factors. On the debt side, it can invest in index-based schemes and exchange-traded funds with different maturity periods.

 

An Attempt to Reduce the Challenge of Market Timing

Determining exactly when to increase or reduce equity exposure is a major challenge for investors. Investing heavily when markets are rising or exiting in fear during a market decline can affect long-term investment outcomes.

The scheme is designed around a Defined Investment Framework, which aims to reduce the need for investors to make such decisions on their own. A systematic approach may also help reduce emotionally driven investment decisions.

 

The ‘ACTS’ Approach

 

The investment framework of the fund is explained through the acronym “ACTS.”

 

A – Allocates: The fund dynamically allocates investments between equity and debt depending on market conditions.

 

C – Capitalises: It seeks to capitalise on opportunities available across passive investment strategies based on market capitalisation, sectors, themes and factors.

 

T – Tax-efficiently: The fund can rebalance its investments within the scheme without creating a separate tax event for the investor each time the portfolio is rebalanced.

S – Sizes: The investment amount is allocated to selected investment strategies based on predefined weights.

 

Equity Valuation Index

The Equity Valuation Index plays an important role in guiding the allocation between equity and debt. The index evaluates the valuation level of the equity market using parameters such as the price-to-earnings ratio, price-to-book value ratio, government security yields and market capitalisation relative to the gross domestic product.

 

As of July 31, 2026, the index stood at 105.2. This was within the defined Neutral Zone, indicating that the market was neither considered significantly overvalued nor significantly undervalued according to the index at that point.

 

Changes in Debt Allocation

The selection of the appropriate maturity period for debt investments will depend on factors such as the direction of interest rates, expectations regarding the Reserve Bank of India’s monetary policy, the structure of the yield curve and expectations for economic growth.

 

Through this approach, the fund seeks to benefit from changing opportunities not only in the equity market but also in the debt market.

 

Key Scheme Details

Particulars	Details
Scheme Type	Open-ended Fund of Funds
NFO Period	August 26 – September 9, 2026
Option	Growth
Minimum Investment	₹1,000
SIP / SWP / STP	Available
Benchmark	CRISIL Hybrid 50+50 – Moderate Index
Fund Managers	Manan Tijoriwala, Sharmila D’Silva, Manish Bandia, Ritesh Lunawat and Nishit Patel

 

Exit Load and Taxation

For units redeemed or switched within the first 12 months, there is no exit load on up to 30% of the units. For units redeemed or switched beyond this 30% limit within the first 12 months, an exit load of 1% will be charged. There is no exit load after 12 months.

According to the scheme information provided, investments held for less than 24 months will be taxed at the investor’s applicable income-tax slab rate. Investments held for 24 months or more will be taxed at 12.5%.

 

Who May Consider This Fund?

Investors who do not want to regularly shift their investments between equity and debt on their own may consider this type of scheme. It may also appeal to investors with a long-term investment horizon who prefer a systematic approach to managing investments across different market cycles.

However, the scheme does not eliminate market risk. Since it invests in equity-oriented schemes, its value can fluctuate with market movements. Investors should therefore consider their investment horizon, risk appetite, financial goals and existing portfolio before investing.

 

For more details & Investments contact..!

R. Venkatesh, Founder,

GuruRam Financial Services Pvt. Ltd.
New No. 14, Old No. 37C, First Floor
Nathamuni Street, T Nagar, Chennai -600017

Tel. +91- 9677267889, 9677025125
Email: gururamforyou@gmail.com

https://www.gururamfinancialservices.com/index.php

ARN 265132

 

For mutual fund investments, financial planning, and life & health insurance, you can confidently approach R. Venkatesh.

 

Read articles written by Mr. R. Venkatesh in Nanayam Vikatan, Aval Vikatan and Vikatan.com a leading personal finance magazine https://www.vikatan.com/author/aar-vengktteess

 

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes.