ICICI Prudential Mutual Fund has launched the ICICI Prudential Dynamic Asset Allocation Passive FOF, an open-ended fund of funds scheme that will dynamically invest in units of passive equity and debt-oriented schemes. The New Fund Offer (NFO) opened on August 26, 2026, and will remain open for subscription until September 9, 2026. According to reports from Dalal Street Investment Journal, the scheme is designed to address investor challenges in deciding when to increase or reduce equity exposure, select suitable schemes and reposition portfolios through changing interest-rate cycles. The fund's primary investment objective is to generate capital appreciation primarily from a portfolio that is invested in units of passive equity oriented and debt oriented schemes, though there can be no assurance or guarantee that the investment objective would be achieved.
The fund uses a defined investment framework built around the 'ACTS' acronym, which stands for allocating across equity and debt, capitalising on opportunities across market-cap, sector, thematic and factor-based passive strategies, tax-efficient rebalancing within the scheme, and sizing allocations through defined weights across selected strategies. As reported by Dalal Street Investment Journal, the equity-debt allocation will be guided by the fund house's in-house Equity Valuation Index (EVI), which considers parameters including price-to-earnings, price-to-book, G-Sec-adjusted earnings and market capitalisation relative to GDP. As of July 31, 2026, the EVI stood at 105.2, which was within the model's neutral zone.
On the debt side, the scheme can invest in target-maturity, constant-duration and constant-maturity Index Funds and ETFs. According to reports from Dalal Street Investment Journal, duration positioning will be influenced by factors including interest-rate trends, RBI policy expectations, the shape of the yield curve and growth expectations. A key feature of the fund is that allocation changes within the scheme do not trigger an investor-level tax event each time the portfolio is rebalanced. This means investors do not need to independently redeem one fund and invest in another whenever the allocation changes, as reported by ICICI Prudential AMC. Chintan Haria, Principal - Investment Strategy at ICICI Prudential AMC, stated that the scheme is designed to simplify investment decisions by using a valuation framework to guide equity-debt allocation and passive funds to implement the strategy across different market segments.
The scheme will be available under Direct and Regular Plans with the Growth option and Income Distribution cum Capital Withdrawal (IDCW) Option. As reported by Dalal Street Investment Journal, the minimum application amount during the NFO is ₹1,000 in multiples of ₹1, with the minimum additional application amount also ₹1,000. The minimum redemption amount can be any amount, and SIP, SWP and STP facilities are available. The fund has an exit load of nil on up to 30% of units redeemed or switched out within one year of allotment, while a 1% exit load applies to units redeemed or switched out beyond that limit within 12 months, with nil exit load after 12 months. The scheme has been assigned a 'Very High' risk rating and will be benchmarked against the CRISIL Hybrid 50+50 – Moderate Index.
According to the scheme details reported by Dalal Street Investment Journal, taxation is stated as the slab rate for a holding period of less than 24 months and 12.5% for a holding period of 24 months or more. The fund house has cautioned that investors will bear the recurring expenses of the scheme in addition to the expenses of the underlying schemes in which the fund of funds invests. Mutual fund investments are subject to market risks, and investors are advised to read the scheme-related documents carefully. The benchmark is the CRISIL Hybrid 50+50 – Moderate Index.
