How SWP in ICICI Equity and Debt Fund will Beat Inflation?

How SWP in ICICI Equity and Debt Fund will Beat Inflation?

Providing balanced portfolio by investing in the various market caps through equity and debt, ICICI Prudential Equity and Debt Fund has shown impressive growth. The fund offered by the ICICI Prudential Mutual Fund has now reached the AUM of Rs 28,633 Cr as on Jul 31, 2018. The expense ratio of the fund is 2.13%. Many investors come with the query regarding the Systematic Withdrawal Plan from ICICI Prudential Balanced Fund; therefore, the financial analysts of MySIPonline have made research that whether the fund is right for SWP or not. All the details of the fund and withdrawal from the fund have been provided in the write-up further:

A Brief About ICICI Prudential Equity and Debt Scheme:

Launched in the year 1999, the fund invests its 60% of corpus in equities, 30% in debt instruments, and the rest 10% in money market instruments. This all provides the diversification to the fund. Providing high exposure to energy and financial sector, the fund managers Mr Sankaran Naren and Mr Manish Bhanthia have delivered 16-20 per cent returns in the past three and five-year periods.

Following the contrarian investment philosophy, the fund management team has majorly invested in large and mid-cap companies. Among debt holdings, ICICI Equity and Debt Fund has been providing the highest exposure to A1+ and cash equivalents. The fund has been selecting the stocks through the blend of value and growth investment strategy, investing in 75 companies in Aug 2018. The top five companies where it has a holding of 22% are ICICI Bank, NTPC, ITC, State Bank of India, and ONGC.

Is SWP a Good Option in ICICI Prudential Equity and Debt Fund (G)?

A popular service that is offered by the mutual funds is a systematic withdrawal plan. Investors can use the SWP to withdraw a specific amount from the fund on weekly, monthly, quarterly, half-yearly, or annually basis. SWP helps the investors and defeats the inflation if a person is invested for the long run.

For example, if an investor has invested the amount of Rs 10,00,000 in ICICI Pru Equity and Debt Fund in the year 2000, then the current value of the investment would be Rs 38,39,325. If a person withdrawal the amount of Rs 8,000 on a monthly basis, the number of installments have been 216.

The total amount that has been withdrawn by the investor would be Rs 17,28,000, which was grown at the rate of 13.32%. The post-tax returns of the fund are inflation adjusted, which help the investors beat the inflation without affecting the lifestyle. All these calculations have been performed by the financial experts of MySIPonline.

Being an aggressive hybrid fund, ICICI Prudential Equity and Debt Fund growth has provided the returns of 14.47 since its launch. Its NAV is Rs 128.93% as on Aug 16, 2018. It has provided the compounded returns of 18.73% in the past five years outperforming its benchmark, CNX NIFTY as well as its category’s average.

SWP could be a good alternative for an investor who wants regular income by investing in ICICI Equity and Debt Fund G. The past performances of the fund are consistently better than its benchmark, however, its future returns may differ which depends on various parameters. So, if you are looking for the investment in the fund, you must check whether it fits your risk profile and provide you with enough period.