ICICI Prudential Savings Fund: Conservative portfolio, consistent performer

Launched in September 2002, ICICI Prudential Savings Fund has featured in the top 30 percentile in the low-duration category of CRISIL Mutual Fund Ranking (CMFR) for the three quarters ended March 2021. The fund’s month-end asset under management (AUM) increased to Rs 28,269 crore in April 2021, from Rs 19,027 crore in May 2018.

Rahul Goswami and Rohan Maru are managing the fund since September 2012 and September 2013, respectively. The fund’s investment objective is to generate income through investments in a range of debt and money market instruments while maintaining the optimum balance of yield, safety and liquidity.

Performance

The fund has consistently outperformed its peers (funds ranked under the low duration category in CMFR in March 2021) over the trailing periods under analysis.

A sum of Rs 10,000 invested in the fund on September 27, 2002 (inception of the fund), would have grown to Rs 41,858 (7.99 per cent CAGR) on May 12, 2021, compared with Rs 37,233 (7.31 per cent CAGR) for the peer group.

Duration management

In the past three years, the fund’s modified duration ranged from 0.47-1.13 years, averaging 0.77 year, compared with 0.75 year for its peers. Its modified duration increased from 0.55 year in February 2021 to 1.13 years in April.

Portfolio analysis

During the past three years, the fund’s allocation to non-convertible debentures and bonds averaged 45.53 per cent, while exposure to money market securities (certificates of deposit and commercial papers) averaged 30.14 per cent. Allocation to government securities averaged 17.9 per cent in the same period.

The fund has been conservative in managing credit risk by taking predominant exposure to the highest-rated debt securities (AAA/A1+) in the past three years. Its exposure to AAA/A1+ rated securities averaged 62.19 per cent. Allocation to AA equivalent rated securities averaged 14.6 per cent. The fund did not take exposure to securities rated A and below in the past three years.