ICICI Prudential Mutual Fund has filed draft papers with SEBI for the ICICI Prudential Retirement Fund. The new scheme is an open-ended retirement solution with lock-in of 5 years or till the investor reaches the age of retirement, whichever is earlier. The scheme will feature 4 investment plans – pure equity plan, hybrid aggressive plan, hybrid conservative plan and pure debt plan. Being an open-ended scheme, subsequent to completion of the lock-in period, you will be able to invest in or redeem scheme units on all business days.
ICICI Prudential Retirement Fund features different benchmarks depending on the plan chosen. The ICICI Pru Retirement Fund Pure Equity Plan will use the Nifty 500 Index as its benchmark, while the hybrid aggressive plan of the scheme will feature the CRISIL Hybrid 50+50 – Moderate Index as its benchmark. The hybrid conservative plan of ICICI Pru Retirement Fund will use the Nifty 50 Hybrid Composite Debt 15:85 Index as benchmark, while the pure debt plan’s benchmark will be the Nifty Composite Debt Index. The historic returns data of the different indices are as follows*:
| Plan Name | Benchmark Index | 1 Year Returns of Benchmark Index (%) | 5 Year Returns of Benchmark Index (%) |
| Pure Equity Plan | Nifty 500 Index | 14.92 | 19.06 |
| Hybrid Aggressive Plan | CRISIL Hybrid 50+50 – Moderate Index | 0.98 | 12.41 |
| Hybrid Conservative Plan | Nifty 50 Hybrid Composite Debt 15:85 Index | 10.45 | 9.25 (3 year returns) |
*The returns data is as of 31st August 2018.
The asset allocation of each plan is also different which impacts the potential returns offered by each variant of the ICICI Prudential Retirement Fund. The pure equity plan of the scheme will invest between 80 to 100% of assets in equities and equity derivatives, while the remaining 20% will be invested in debt and money market instruments. This plan may also invest in securitized debt (up to 5% of assets) as well as up to 50% assets in international ETFs, foreign securities, global depository receipts and American depository receipts. The asset allocation of the hybrid aggressive plan will be as follows*:
| Investment Type | Minimum Allocation (%) | Maximum Allocation (%) |
| Equity and Equity Derivatives | 65 | 100 |
| Debt and Money Market Instruments | 0 | 35 |
| Gold, Gold ETFs, units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), etc. | 0 | 35 |
| Stock Lending | 0 | 50 |
| Securitised Debt | 0 | 15 |
*The allocations are estimates and may change depending upon fund manager’s decisions.
The indicative asset allocation of the hybrid conservative plan is as follows*:
| Investment Type | Minimum Allocation (%) | Maximum Allocation (% ) |
| Money Market Instruments and Debt Securities | 70 | 95 |
| Equity and equity derivatives | 5 | 30 |
| Units of InvITs and REITs | 0 | 10 |
| Securitised Debt | 0 | 50% of debt allocation |
| Stock Lending | 0 | 20 |
*The above allocations are estimates and may change based upon fund manager’s decisions.
The pure debt plan of the ICICI Prudential Retirement Fund will invest up to 100% of assets in various money market and debt instruments, while units of InvITs and REITs may comprise up to 10% of scheme assets. Additionally, this plan may choose to maintain securitized debt exposure of up to 50% of net assets as well as derivative exposure of up to 100% of net scheme assets.
ICICI Prudential Retirement Fund will be co-managed by Sankaran Naren and Priyanka Khandelwal. Other leading schemes managed by them include ICICI Prudential Equity Savings Fund, ICICI Prudential Multi Asset Fund, ICICI Prudential Small Cap Fund and ICICI Prudential US Bluechip Equity Fund. Among these, the ICICI Prudential Small Cap Fund has witnessed correction in 1 year period with returns of -8.72% while its longer term returns are higher at 6.55% and 13.96% (as of 25th September,2018).