An impressive show in the last two years has propelled this fund from a three-star to a four-star rating. The fund invests a minimum of 65 per cent in equity. This allocation can go up to 80 per cent depending on market conditions.

ICICI Prudential Equity & Debt Fund practises some degree of tactical allocation based on an in-house assessment of market valuations. Within equities, over 80 per cent of the allocation is parked in large-cap stocks, which is higher than the peers' allocations. It invests in a blend of large and mid-cap stocks, with a good track record and long-term growth potential. The allocation between large and mid-caps is decided on a tactical basis rather than any predefined ratio.

ICICI Prudential Equity & Debt Fund follows a blend of growth and value styles. On the debt portion, the fund does take aggressive duration calls. Throughout 2015-16, for instance, the average maturity was higher than 10 years. This has been toned down lately to four to five years as interest rates have headed lower. While the fund seeks to add to returns based on rate calls, it is very conservative about taking on credit risks. Sovereign and money-market securities dominate its portfolio.

On a three-year and five-year basis, the fund has outperformed its benchmark by 2 to 5 percentage points and the category by 1 to 2 percentage points. Traditionally, the equity portfolio has been mid-cap biased. But in the last one year, its weights have veered sharply towards large-cap stocks. The fund is now significantly overweight on large-caps relative to the category.

ICICI Prudential Equity & Debt Fund - A balanced fund which has tactical allocation to bump up returns.