ICICI Prudential Balanced Fund (G) Underperforms The Sensex Over All Time Periods

Background: Prudential ICICI Asset Management Company Ltd manages prudential ICICI Mutual Fund. A joint venture between Prudence Plc, UK's leading insurance company and ICICI Bank Ltd. India's premier financial institution. Prudential ICICI Mutual Fund house has Rs.56212.84 crore assets under management at the end of October 2007.

ICICI Prudential Balanced Fund (G) an open-ended equity-balanced scheme launched in September 1999.The primary investment objective of the fund is to generate long-term capital appreciation and current income from a portfolio that is invested in equity and equity related securities as well as in fixed income & money market securities. The minimum investment amount is Rs.5000 and in multiples of Rs.500 thereafter. The unit NAV of the scheme was Rs.43.44 as on 13 November 2007.

Portfolio: The total net assets of the scheme increased by Rs.20.91 crore to Rs.445.22 crore in October 2007.

ICICI Prudential Balanced Fund (G) took fresh exposure to four stocks in October 2007. The scheme has purchased 52,617 units (1.90%) of Aditya Birla Nuvo, 2.99 lakh units (1.61%) of NTPC, 1.94 lakh units (1.45%) of Zee Entertainment Enterprises and 80,216 units (1.37%) of Tata Motors in October 2007.

The scheme completely exited Reliance Energy by selling 1.00 lakh units (2.84%), United Phosphorus by selling 2.00 lakh units (1.87%), Tata Steel by selling 91,205 units (1.83%), and Andhra Bank by selling 5.12 lakh units (1.26%) in October 2007.

Sector-wise, the scheme took fresh exposure to Textiles – Manmade at 1.90%, Entertainment / Electronic Media Software at 1.45% and Automobiles - LCVs / HCVs at 1.37% in October 2007.

Sector-wise, the scheme did exited completely from Pesticides / Agrochemicals – Indian at 1.87% in October 2007.

The scheme had highest exposure to Reliance Industries with 1.77 lakh units (11.10% of portfolio size) followed by Jain Irrigation Systems with 3.11 lakh units (4.05%) Grasim Industries with 47,766 units (3.97%) and Bharat Heavy Electricals with 65,785 units (3.86%) among others in October 2007.

It reduced its exposure to Bharti Airtel by selling 51,712 units to 1.55 lakh units (1.08%), State Bank of India by selling 20,550 units to 45,002 units (by 0.92%), Sterlite Technologies by selling 2.11 lakh units to 2.21 lakh units (0.86%) and HCL Technologies by selling 97,668 units to 1.87 lakh units (0.71%) among others in October 2007.

Sector-wise, the scheme had highest exposure to Refineries at 11.10% (from 9.61% in September 2007), followed by Diversified – Mega at 6.47% (6.52%), and Plastics Products at 5.58% (5.49%) among others in October 2007.

Sector wise, the scheme had reduced exposure Banks - Public Sector to 3.79% (by 2.18%), Steel - Large to 2.82% (by 1.36%) and Computers - Software - Large to 4.65% (by 0.96%) among others in October 2007.

Performance: The scheme under performed the category average over most of the time periods. It has underperformed the Sensex over all time periods.

Over three-month period ended as on 13 November 2007, the scheme posted 18.53 % of returns outperforming the category average of 15.71%. It underperformed the Sensex that posted 24.77% during the same period.