ICICI Prudential Balanced Hybrid Fund will invest 40-60 per cent each in equity and debt instruments, with no arbitrage exposure, aiming to balance long-term wealth creation and income generation while limiting downside during market volatility
ICICI Prudential Mutual Fund has launched the ICICI Prudential Balanced Hybrid Fund, an open-ended balanced scheme investing exclusively in equity and debt instruments, with no arbitrage permitted. The New Fund Offer (NFO) opened on June 30, 2026, and will close on July 14, 2026. The scheme seeks to generate capital appreciation and income through an actively managed portfolio comprising equity and fixed-income investments.
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Balanced Asset Allocation Strategy
Under the scheme, 40-60 per cent of the portfolio will be invested in equity and equity-related instruments, while the remaining 40-60 per cent will be allocated to debt and money market instruments. The allocation between the two asset classes will be actively determined based on market valuations, earnings outlook and bond yields.
On the equity side, the fund will invest across market capitalisations and sectors. On the debt side, it will seek opportunities across duration, AAA-rated securities, Government Securities (G-Secs) and credit instruments through an active investment strategy. Unlike many other hybrid funds, the scheme will not invest in arbitrage opportunities, maintaining a pure equity-and-debt allocation.
Management Commentary
Commenting on the launch, Sankaran Naren, Executive Director and Chief Investment Officer, ICICI Prudential AMC, said: “ICICI Prudential Balanced Hybrid Fund is designed to strike a suitable balance between equity and debt allocation, with each receiving an allocation of 40-60 per cent of the portfolio, basis prevailing market conditions. We believe this balanced approach is well placed to navigate the current environment while supporting both income generation and long-term wealth creation for investors.”
Designed for Uncertain Market Conditions
According to ICICI Prudential Mutual Fund, the launch comes at a time when investors are navigating increased uncertainty arising from the West Asia conflict, potential inflationary pressures, and evolving global market conditions. While equity markets remain an important source of long-term wealth creation, debt investments generally offer greater stability. By combining both asset classes within a single portfolio, the fund aims to help investors navigate volatile market conditions while supporting income generation and long-term wealth creation.
The fund house also highlighted historical performance data to demonstrate the benefits of balanced investing. During FY2025-26, the Nifty 50 TRI declined 2.5 per cent, while the CRISIL Composite Bond Index generated a return of 3.6 per cent. A hypothetical 50:50 equity-debt portfolio delivered a positive return of 0.5 per cent, illustrating how combining both asset classes can help cushion downside during volatile equity markets.
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How the Scheme Differs from Other Hybrid Funds
The Balanced Hybrid Fund follows SEBI’s Balanced Hybrid category, where both equity and debt receive allocations between 40 per cent and 60 per cent. This differentiates it from Aggressive Hybrid Funds, which allocate 65-80 per cent to equities and 20-35 per cent to debt, and Conservative Hybrid Funds, which invest 10-25 per cent in equities and 75-90 per cent in debt. Additionally, no arbitrage allocation is permitted in the scheme.
ICICI Prudential Investment Strategy
The equity portfolio will be constructed using a combination of top-down and bottom-up research, taking into account macroeconomic factors such as GDP growth, inflation, interest rates, currency movements and sector cycles, alongside company-specific parameters including profitability, cash flow generation, competitive advantages and demand outlook.
The debt portfolio will be managed across the credit and duration spectrum, based on the fund manager’s outlook on interest rates, credit spreads and the broader economy. The investment process combines accrual strategies with tactical duration management and a structured credit evaluation framework.
ICICI Prudential Product Details
The minimum application amount for the scheme is Rs 500, and thereafter in multiples of Re 1. The scheme will be available under both Direct and Regular plans and will be benchmarked against the CRISIL Hybrid 50+50 Moderate Index. The fund will be managed by Roshan Chutkey, Manish Banthia and Akhil Kakkar. Investors will benefit from a T+3-day redemption cycle, subject to the scheme terms.
ICICI Prudential Risk Profile
According to the official Riskometer, the ICICI Prudential Balanced Hybrid Fund carries a “High” risk level and is suitable for investors seeking long-term capital appreciation and income through investments in equity and debt instruments. The fund house has advised investors to evaluate their risk appetite and read all scheme-related documents carefully before investing.
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Disclaimer: The article is for informational purposes only and not investment advice.