The ICICI Prudential Balanced Fund, the second-largest in its category with ₹71,150 crore in assets as of February 2026, has increased its equity allocation to 65%, marking the highest level in five years. This decision, co-managed by S Naren (Chief Investment Officer), reflects a growing comfort with market valuations following a recent sell-off. Naren stated that favorable valuation and sentiment indicators suggest it is an appropriate time for investors to gradually increase their equity allocation. The fund, which operates as a Balanced Advantage Fund, dynamically adjusts its equity and debt exposure based on market conditions, typically maintaining net equity exposure between 30% and 80%. However, Naren expressed caution, noting that while the current increase in equity exposure is reminiscent of 2020, return expectations should be more moderate due to global uncertainties. He emphasized the importance of using asset allocation funds to navigate market volatility effectively.