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ICICI Prudential Mutual Fund has re-categorized ICICI Dynamic Plan as a multi-asset fund. The scheme will be called ICICI Prudential Multi-Asset Fund. ICICI Prudential Dynamic Plan was a multicap fund that used to invest across market capitalisation. The new scheme will invest in multiple assets like equity, debt, gold, etc.
the re-categorisation of the scheme has created a lot of confusion among investors. They believe the similarity in names — multicap and multi-asset — is adding to the confusion.
According to the Sebi circular on categorisation of mutual funds, multi-asset schemes will invest in at least three asset classes, with a minimum allocation of at least 10 per cent each in all three asset classes. For example, a scheme investing in equity, debt and gold will qualify as a multi-asset scheme. A muilticap scheme, on the other, is an equity scheme that would invest across market capitalisation. Multi-asset schemes are categorised under the hybrid category.
Many advisors believe the change amounts to a total departure from the earlier mandate, and investor should seriously consider quitting the scheme. There is no similarity apart from the names. The scheme is undergoing a mandate change which will change the portfolio of investors. If there is a change in the portfolio, investors should switch
The scheme will now invest in three assets, for example, equity, debt and gold. Investors who are not interested in such an allocation can move out. But, those who are interested to hedge their portfolios with another asset can stay put,
The existing unit holders of the scheme have an option to exit — that is, either redeem their investments or switch their investments to any other schemes of ICICI Prudential Mutual Fund, within 31 days, starting from April 25 to May 25, at applicable NAV, without payment of any exit load. However, exiting the scheme will incur either short-term capital gains tax of 15 per cent or long-term capital gains tax of 10 per cent.
you should stay invested in the new scheme only if you have plans to diversify into multi-asset schemes.“If you are interested in the new category of multi-asset funds, you can stay invested. You can invest the extra money in a new multicap scheme. This way you can save on the taxes
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