Best Fund House – 2016 & Best Dynamic Asset Allocation/Volatility Fund (Since Inception): ICICI Prudential Balanced Advantage Fund (IPBAF)
ICICI Prudential Asset Management Company Ltd. is India’s largest asset management company, with a particular focus on bridging the gap between savings and investments and creating long term wealth for investors through a range of simple and relevant investment solutions. We spoke to them to find out more about how their unique strategy achieves this.
The company is a joint venture between ICICI Bank, a well-known and trusted name in financial services in India and Prudential Plc, one of the UK’s largest players in the financial services sectors. Apart from asset management, they also provide portfolio management services for investors across the country, along with international advisory mandates for clients across international markets in asset classes like debt, equity and real estate. Throughout the years, they have developed a product suite to cater for clients across a range of different categories. On the retail side, a general tendency of Indian investors is to invest in equity when the markets are surging high, while pulling out money when the markets are underperforming- which may not necessarily lead to the best investment experience.
Therefore, their product suite offers a product- ICICI Prudential Balanced Advantage Fund -which endeavours to offer lower volatility and tax efficiency. The fund is structured to invest in equities when markets are cheap and book profits when markets are rising, which is the opposite of what retail investors tend to do; thus aiming to minimise risk and provide reasonable long term returns.
As a company working in a highly competitive industry, there are a number of aspects behind how they have forged a position of pre-eminence in the Indian mutual fund industry. Firstly, they provide a diverse range of services all within the same fund house. In the Indian MF industry, we often see products being without clear positioning or distinction, whereas ICICI Prudential AMC has ensured sharply focused products with every fund giving a different slice of market to the investor.
Alongside this attribute, IPAMC is driven by Investorcentricity and Investment-centricity. The company’s core objective has been to keep investors’ interest at the helm by offering investors a product suite that caters to their every possible need and creating significant value for them by managing money well.
While people are the essence of this organisation, fund management is not about having star fund managers but rather strong processes in place. The fund house has clearly defined internal processes on every aspect of fund management, which includes cash calls, portfolio construction, stock selection, risk mitigation, portfolio review and monitoring.
In terms of culture, they have built diversity within the fund house by offering variety of investment strategies, including value/contrarian, growth at reasonable price (GARP) and growth, consciously aligning investing styles of different fund managers with the respective fund objectives.
In fact, they have a culture where fund managers are encouraged to develop their individual styles but at all times these have to be practised within the overall investment framework. The fund managers have been asked to follow the fund’s objective to the hilt and hence no style drift is allowed beyond the boundaries of the fund’s mandate.
In this environment, products are mapped to people with certain style strengths. The team has three key portfolio managers:
• Sankaran Naren | Contrarian & value oriented.
• Manish Gunwani | Focus on management and numbers.
• Mrinal Singh | Less concentration, diverse portfolio, capability to pick value stocks.
In total, the investment team comprises 33 professionals, led by senior professionals in equity, fixed income and real estate.
Investments function is led by S Naren, CIO, having 24 years of rich experience in broking, project finance, investment banking and fund management. Naren has built a fundamentally strong investment team that follows a disciplined investment approach which would combine global and regional considerations with a local focus. Additionally, fund managers are supported by in- house teams providing market leading research, risk management and dealing capabilities.
As with any company working in today’s fast-paced world, they are using all of the recent advances in technology to improve and enhance the services that they provide. They engage with advisors through IPRU Touch, a mobile application created to help financial advisors to transact on behalf of investors. Integration of key processes, minimisation of paper work, optimal content experience and streamlining of the sales activities are some of the many goals they aim to achieve for distributor community through IPRU Touch.
Managing money is a huge responsibility and it is their constant endeavour to provide reasonable risk-adjusted returns to investors. Their processoriented investment approach will help them sustain consistency in performance of funds in the years to come. In fact, they keep a track of ‘happy customers’ to know how satisfied their investors are; and, it gives them immense satisfaction to have a set of happy customers across investment horizons. A fund house managing money well is bound to attract more investments.
Company: ICICI Prudential AMC
Name: Adil Bakhshi
A-Wing, 13th Floor,
Bandra Kurla Complex
Telephone: (+91 22) 66470274