The ICICI Prudential Liquid Plan is designed to generate reasonable level of returns that are higher than those offered by banks and in line with the low level of risk associated with liquid funds. Additionally, this liquid mutual fund will offer a high level of liquidity such that investors can use it to park their excess cash and earn from the idle money. As per the current plan, an estimated 80% of the total fund value available is expected to be invested in various money market securities, while the remainder would be invested in a range of debt instruments of high quality.
ICICI Prudential Liquid Plan is an open-ended liquid debt fund from ICICI AMC, which is designed to provide high degree of liquidity. This type of debt fund is preferred by individual investors who are seeking short-term capital appreciation of excess funds, which would earn a much lower rate of interest if left idle in bank accounts. The portfolio of ICICI Prudential Liquid Plan comprises various short-term debt securities and related instruments that offer a higher return than a savings account while offering a lower level of risk.
About Liquid Mutual Funds
Liquid mutual funds are a specific type of debt fund that offers higher rates of return as compared to savings account while offering a high level of liquidity. Investors who have excess funds and want to park them for a short time in order to earn higher rates of return at lower risk opt for liquid funds. Liquid funds as a rule invest only in very short term, high liquidity instruments that have a lower level of risk as compared to many other investments.
Fund Information and Statistics
- Launch Date: The ICICI Prudential Liquid Fund was available for investment on 17th November 2005.
- Fund Type: This is an open-ended liquid debt fund that is available for investment by investors seeking high level of liquidity and low level of risk while generating reasonable returns.
- Minimum Investment: The minimum investment in this ICICI Prudential AMC scheme is Rs. 500 with additional investments in multiples of Rs.100.
- Risk Category: The scheme features a low level of risk which is consistent with reasonable rate of return offered by the ICICI Prudential Liquid Fund.
- Returns: Over the past 10 years, the trailing rate of return for the ICICI Prudential Liquid Fund has been recorded at 8.14% as compared to the 4.79% growth offered by the CCIL T Bill Liquidity Weight benchmark during the same period.
- Exit Load: No entry or exit load is applicable to the ICICI Prudential Liquid Plan. Thus the investor is free to enter and redeem at any time without any additional charges.
- Tax Considerations: Being a type of debt fund, this liquid fund is subject to the applicable capital gains taxation criteria. In case the investor redeems investment before a 3 year period, tax will be applicable as per the investor’s applicable IT slab. If the investment is held for a period beyond the 3 year period from the date of investment, tax is calculated as 20% of the total gain with indexation. Dividends earned from debt mutual fund are subject to DDT (dividend distribution tax), which is automatically deducted by the AMC at the time of crediting the dividend. The applicable DDT rate for individuals is currently 28.84%.
- Fund Manager: The fund is managed by Rohan Maru and Rahul Goswami, both of whom have extensive experience in researching and managing mutual funds.
Plans and Options Available with ICICI Prudential Liquid Plan
- Direct Plans: The direct plan of the ICICI Prudential Liquid Plan scheme can be availed by investors who make their investment directly with ICICI Prudential AMC. These plans have higher NAVs and also offer higher returns as there are no additional brokerage or portfolio management charges. Direct Plans are further divided into the Growth and Dividend categories. Furthermore, the individual can opt for various types of dividend option such as daily, weekly, quarterly, bi-annual, half-yearly and annual.
- Regular Plans: In case of regular plans, the investor has to purchase via a third-party brokerage house or a bank, thus some additional charges (brokerage fee/portfolio management fees) may be applicable. In case of regular plans, the investor can choose between growth and dividend options. Additionally, there is the option to choose between different dividend options such as monthly, annual etc. Moreover, there is the option of investing in a bonus option of the ICICI Prudential Liquid Plan that offers a range of other benefits.
- Institutional Plans: Whereas, the direct and regular plans are availed by individual investors, the ICICI Prudential Liquid Plan Institutional plan can be availed by institutional investors in order to diversify their investment portfolio. The institutional plan provides a high level of liquidity to these investors, while minimising risk and providing a reasonable rate of return. Additionally, there is the option of either growth or the dividend plan. Additionally, there is the institutional plus plan that can be availed.
- Lump sum/SIP Investments: Both lump sum and SIP investments are available in case of the ICICI Prudential Liquid Plan as long as the minimum investment amount requirements are met. The investor may also opt for a SWP (systematic withdrawal plan) to liquidate the investment bit by bit and invest it in another scheme of his/her choice.
Investment Eligibility in ICICI Prudential Liquid Plan
Any individual who is over 18 years of age and can complete the required KYC eligibility criteria is eligible to invest in the scheme. Not only individual investors, even institutional investors can choose to invest in ICICI Prudential Liquid Plans to diversify their portfolio and infuse a greater degree of liquidity along with acceptable rate of returns with low level of risk.
Top Holdings of ICICI Prudential Liquid Plan
The following are some of the key debt and debt-related instruments that ICICI Prudential Liquid Plan is invested in*:
|Investment Sector||Top Holdings|
|Non-Convertible Debentures/Bonds||Indiabulls Housing Finance, HDFC Ltd, Rural Electrification Corporation Ltd., Power Finance Corporation, Adani Ports and SEZ Ltd., The Indian Hotels Company Ltd., Tata Sons etc.|
|Deep Discount/Zero Coupon Bonds||Kotak Mahindra Prime, Tata Capital Financial Services, Axis Finance, etc.|
|Deposits (maturity within 91 days)||Deutsche Bank, etc.|
|Money Market Instruments||NABARD, Indian Railway Finance Corporation, L&T Finance Ltd., Bajaj Finance Ltd., Vedanta, Piramal Enterprises Ltd., Tata Capital Financial Services, The South Indian Bank, Piramal Finance, BMW India Financial Services, IDFC Bank, Hero Fincorp., Reliance Capital, Canara Bank, Birla Corporation, etc.|
|Treasury Bills||91 days treasury bills, 56 days CMB, 49 days CMB etc.|
|Others||CBLO, Net Current Assets, government securities, etc.|
*The list is indicative and subject to change as per market conditions and fund objectives.
How to Invest in ICICI Prudential Liquid Plan
Individuals who are interested in investing with ICICI Prudential AMC can follow either the offline route or the online route to make their investment. In either case, the individual investor has the option of either going for a direct plan or a regular plan. Due to lower fund management fees, the returns afforded by the direct plan are usually higher than that in case of regular plans. Direct plans are also preferable as no extra portfolio management fees or brokerage charges are payable. You can also opt for a free Paisabazaar.com investment account and start investing in mutual funds of your choice within minutes.