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ICICI Prudential Long Term Bond Fund
ICICI Long Term Bond Fund is a long-duration debt fund that invests primarily in bonds with more than seven years. It aims to earn higher returns than bank fixed deposits of similar tenure. The fund portfolio includes 85.06% in sovereign GOI bonds and 12.59% in corporate debt securities of various companies rated up to AA+.
Investment Plans
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- ICICI Prudential Long Term Bond Fund
Fund in Brief
ICICI Prudential Long Term Bond Fund is available in four plan categories:
- Growth - Regular
- IDCW as and when - Regular
- Growth - Direct
- IDCW as and when - Direct
Under regular plans, the investors procure mutual fund units using the distributor network. In direct plans, the investors buy mutual fund units directly from the Fund House.
IDCW denotes Income Distribution cum Capital Withdrawal (Payout and Reinvestment Facility) plan. The scheme offers quarterly, semi-annual, and annual frequency payout transfer facilities subject to the surplus availability that is distributed as per the SEBI guidelines.
Investment Facts
|
Parameter |
Details |
|
Fund Name |
ICICI Prudential Long Term Bond Fund |
|
Fund House |
ICICI Prudential Mutual Fund |
|
Launch Date |
09-Jul-1998 |
|
Benchmark |
Nifty Long Duration Debt TRI |
|
Type |
Open-Ended |
|
Minimum Investment |
Rs 5,000 Minimum Additional Investment: Rs 1,000 Minimum SIP Investment: Rs 1,000 |
|
Lock-in Period |
None |
|
Entry Load |
Nil |
|
Exit Load |
Nil |
|
Return Performance |
Average |
|
Fund Consistency |
Moderate |
|
Risk Level |
Low |
Investment Objective
ICICI Long Term Bond Fund is a long-duration debt fund that generates income by investing in a broad spectrum of debt and money market instruments. While it is done by maintaining a fine balance between safety, liquidity, and yield, there is no assurance of achieving the said investment objective each time.
Fund Summary
-
ICICI Long Term Bond Fund Regular Plan-Growth
- Risk level- Moderate
- NAV-Rs. 71.1651 as of 09.07.2021
- Expense Ratio-2.01% (as on 31.05.2021)
- Fund Started-09.07.1998
-
ICICI Long Term Bond Fund Regular Plan IDCW
- Risk level- Moderate
- NAV-Rs. 12.0907 as of 09.07.2021 (Quarterly)
- NAV-Rs. 11.3950 as of 09.07.2021 (Semi-Annual)
- NAV-Rs. 11.6040 as of 08.07.2021 (Annual)
- Expense Ratio-2.01% (as on 31.05.2021)
- Fund Started-09.07.1998
-
ICICI Long Term Bond Fund Direct Plan-Growth
- Risk level- Moderate
- NAV-Rs. 76.2015 as of 09.07.2021
- Expense Ratio-1.41% (as on 31.05.2021)
- Fund Started-01.01.2013
-
ICICI Long Term Bond Fund Direct Plan IDCW
- Risk level- Moderate
- NAV-Rs. 12.4589 as of 09.07.2021 (Quarterly)
- NAV-Rs. 12.2062 as of 09.07.2021 (Semi-Annual)
- NAV-Rs. 12.8903 as of 08.07.2021 (Annual)
- Expense Ratio-1.41% (as on 31.05.2021)
- Fund Started-01.01.2013
Fund Manager
- Mr Manish Banthia (since September 2013)
- Mr Anuj Tagra (since December 2020)
People Also Read: SIP Calculator
Fund Returns Summary
-
ICICI Long Term Bond Fund Regular Plan-Growth
Period
Returns Per Year (Annualized)
6 Months
-1.35%
1 year
1.27%
2 years
5.99%
3 years
9.48%
5 years
8.14%
10 years
8.49%
Since Inception
8.90%
-
ICICI Long Term Bond Fund Regular Plan IDCW (Annualized)
Period
Quarterly
Semi-Annual
Annual
6 Months
-1.35%
-1.35%
-1.35%
1 year
1.04%
-2.81%
1.27%
2 years
5.13%
0.91%
2.93%
3 years
7.52%
5.32%
7.36%
5 years
5.33%
3.44%
5.64%
10 years
5.89%
5.02%
-
Since Inception
6.00%
6.81%
5.95%
-
ICICI Long Term Bond Fund Direct Plan-Growth
Period
Returns Per Year (Annualized)
6 Months
-1.06%
1 year
1.88%
2 years
6.56%
3 years
10.08%
5 years
8.86%
Since Inception
9.04%
-
ICICI Long Term Bond Fund Direct Plan IDCW (Annualized)
Period
Quarterly
Semi-Annual
Annual
6 Months
-1.06%
-1.06%
-1.06%
1 year
1.63%
1.70%
1.88%
2 years
5.63%
4.46%
3.43%
3 years
7.93%
8.29%
7.86%
5 years
5.90%
5.39%
6.09%
Since Inception
5.97%
5.76%
7.57%
Summative Pros and Cons
|
Pros |
Cons |
|
The fund's returns over a 5-10 year period are at par with its benchmark. |
Long Term bond funds are subject to interest rate volatility. |
|
The fund aims to earn better returns than bank fixed deposits over long tenures. |
The fund has no scheduled repayment or interest payout, unlike a bank deposit. |
Benefits of ICICI Prudential Long Term Bond Fund
Some of the benefits of ICICI Prudential Long Term Bond Fund are as follows:
- Long Only Investments: Since these funds invest primarily in debt instruments maturing in more than seven years, the risk of incurring losses over such a long period is low.
- Indexation benefit: To attain optimum benefits by taking advantage of the indexation benefit, investing in these funds for a tenure of more than three years is advisable. After indexation benefits, the gains from the sale of such funds are taxed at 20%. Investors falling in the 30% tax bracket will stand to gain from this tax benefit.
Fund House Details
ICICI Prudential Long Term Bond Fund is part of the Fund House, ICICI Prudential Mutual Fund - a Trust. SEBI registered ICICI Prudential Asset Management Company Limited (AMC) acts as the Investment Manager to all the Schemes of ICICI Prudential Mutual Fund. The fund has a diversified product basket of over 68 schemes with active investors exceeding 60 lakhs across 300 locations in India.
The promoter shareholders of the Fund House are:
- ICICI Bank: 51% holdings
- Prudential Plc: 49% holdings
Who Can Invest in ICICI Prudential Long Term Bond Fund?
ICICI Prudential Long Term Bond Fund is suitable for investors who wish to earn higher returns than bank fixed deposits over a 5-10 years period. Since such long tenure funds have to withstand interest rate risk and credit risk, investors who have the money to withstand the inherent risk of price volatility in these funds may consider investing in them for such extended tenure.
In Conclusion
ICICI Prudential Long Term Bond Fund’s annualized returns over the 5-10 years tenure have been better than the NIFTY Composite Debt Index benchmark. Investors with an investment horizon of 5-10 years in debt funds may consider this fund a reasonable choice.
FAQ's
-
Q. Will ICICI Prudential Long Term Bond Fund help in long-term wealth creation?
Ans: ICICI Prudential Long Term Bond Fund is a debt fund, and the rate of return from a debt fund will not significantly beat the inflation rate. Investors with a long investment horizon of 5 years or more may consider investing in equity funds to create long-term wealth. -
Q. Should I invest in ICICI Prudential Long Term Bond Fund as a lump sum or by way of a systematic investment plan (SIP)?
Ans: Funds such as ICICI Prudential Long Term Bond Fund are apt for investors who want to invest long-term in the bond market but cannot decide on the interest rate or credit risk. To spread the duration risk over investment tenure, it is prudent to opt for the SIP route. -
Q. Does ICICI Prudential Long Term Bond Fund present any investment risks?
Ans: Investments in a Long Term bond fund bear inherent risks such as inability to sell securities, interest rate risk, credit risk, reinvestment risk, etc. The fund invests by acquiring bonds with different maturity dates and judiciously balancing the portfolio amongst creditworthy debt papers to counter the various risks. -
Q. What are annualized returns?
Ans: The return earned for a period of more than a year is annualized. For instance, a 5-Year annualized return of 10% means the fund provided a 10% return each year, on average, for the last 5 years. An initial investment of Rs 1,000 would have grown to: Rs.1,000 x 1.105 = Rs.1,610 in 5 years.
*All savings are provided by the insurer as per the IRDAI approved insurance
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*Tax benefit is subject to changes in tax laws. Standard T&C Apply
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†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
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