ICICI Prudential Dynamic Targets To Minimize Downside Risk

Mumbai: ICICI Prudential Dynamic is a growth-oriented fund that infuses across market capitalisation and sectors with a bottom up approach of infusing. What differentiates this multi-faceted fund from other opportunity funds is that it targets to minimize downside risk by adopting a defensive strategy in a bull market. Consequently, the fund is saddled with a large corpus in cash as the market goes up. At the end of June 2007, when markets were trading at an all time high, the fund held 12.6 per cent of its assets in cash. Logically, the mandate of the fund is such that during a bull run, its gains would be capped, since a portion of its portfolio fails to participate in the market's upside. During the two recent corrections the fund lost much less than the average diversified equity fund - in the June 2006 quarter (April-June 2006), the fund lost (-) 11.21 per cent against the category's loss of (-) 13.6 per cent. For the quarter ending March 2007, the fund lost (-) 4.23 per cent compared to the category's slide of (-) 5.93 per cent. While there are other hybrid asset allocation funds functioning, none of them can hold a candle to ICICI Prudential Dynamic's truly dynamic performance.