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+.

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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

  1. 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
  2. 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
  3. 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
  4. 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)

Fund Returns Summary

  1. 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%

  2. 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%

  3. 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%

  4. 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%

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

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.

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