Mutual Funds >> Fund of the Week
Prudential ICICI Liquid Plan
  • Investment Objective: Reasonable returns with low risk and high liquidity.
  • Chief Inv. Off: Dileep Madgavkar
  • VIEW LATEST FACT SHEET | DOWNLOAD FORM

    • Profile

    The Prudential ICICI Liquid Plan (PlLP) was introduced in June 1998 targeting individuals/corporates by offering them a liquid investment option to park their surplus funds. The fund's performance is comparable to that of its peers (0.1% growth over 1 week, 0.6% - 1 month).

    As on September 20, 2001 the fund's net assets exceeded Rs 19 bn.

    Is this fund for you?
  • Entry load: Nil
  • Exit load: Nil
  • Risk: Low
  • Return: Low

    • By nature liquid funds serve the need of parking idle funds and to that extent they don't qualify as an investment option as returns take a backseat. It is ideal for high networth individuals and corporates that do not wish to have any liquidity constraints by investing in bonds and short term fixed deposits. Their prime concern is liquidity and not returns. In a scenario like the current one where equity and bond markets are witnessing some volatility, investors can draw comfort and stability by parking their funds in liquid funds until a more definite scenario emerges.

    Performance Analyses

  • Peer Table

    LIQUID FUNDS NAV (Rs) 1-WK 1-MTH 1-YR INCEP.
    ALLIANCE LIQ RG 17.4 0.2% 0.1% 15.7% 12.9%
    HDFC LIQUID G 10.9 0.1% 0.6% 9.1% 9.1%
    PRU ICICI LIQ G 13.5 0.1% 0.6% 8.9% 9.4%
    TEMPLETON LIQUID G 13.6 0.1% 0.6% 8.9% 9.6%
    BIRLA CASH G 14.8 0.1% 0.6% 8.8% 9.4%

    (Returns over 12 months are annualised)

  • Portfolio Strategy

    PILP's investments are in the highest safety (AAA, P1+) fixed income instruments. As on September 30, 2001, the fund's average maturity was 1 month 21 days, which is on the lower side and connotes safety, as being invested on the longer end (more than 6 months) could prove detrimental in these volatile times. The fund had 30.5% in NCDs/bonds, 43.2% in cash/call and 26.3% in commercial paper.

    • Outlook

    The fund's performance so far has been satisfactory and in this volatility that is significant particularly when we consider that some liquid funds have given a negative return. The fund has stuck to its main objective of providing liquidity to investors and maximising returns at the same time. So long as the fund does not take exposure to longer dated securities (more than 6 months) right now, it should serve as a good parking option for investors.

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