ICICI Prudential Equity Minimum Variance Fund: New NFO

ICICI Prudential Equity Minimum Variance Fund: Complete Overview

ICICI Mutual Fund introduced an open-ended equity scheme as ICICI Prudential Equity Minimum Variance Fund under ICICI Prudential AMC. The NFO date is from 18 November to December 02, 2024, with an NFO price of Rs.5000.

This ICICI Mutual Fund scheme will invest in a variety of equity securities to reduce portfolio volatility. Today we're dedicated to providing you with useful information on this new NFO, including financial characteristics and any prior performance.

 

Scheme Features 

• An equity-oriented scheme.

• Objective to provide long-term capital appreciation.

• It aims for lower volatility in the fund vis-à-vis the benchmark.

• It is focused on being a risk-adjusted returns scheme rather than just return-focused.

• Spread the diversified portfolio across companies of the Nifty 50 Index.

• Nifty 50 TRI is the Benchmark of the Scheme.

The scheme will invest 80-100% in equity and equity-related instruments based on the Minimum Variance Factor, 0-20% in other equity & equity related instruments, 0-20% in money market instruments (margin money), 0-10% in Units issued by REITs and INVITs.

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Scheme Investment Strategy

• The market capitalization in the portfolio is focused on large-cap stocks.

• Stocks characterized by low price fluctuations are given a higher relative weight, and vice versa.

• In-depth research of the relevant companies within the sector.

• Managing the weight and allocating the views based on the prevailing economic scenario.

• The aim is to create a portfolio that minimizes volatility but allows for investment in a variety of sectors.
  
  

Benefits of Active Allocation

• Risk reduction (inversely correlated stocks) based on factors including interest rates, crude oil prices, and the value of the Indian rupee.

• Active perspective when it comes to investing (Low variance + other aspects of risk management) and the reinvestment strategy theory (Output Low variance Only).

• Aids in carrying out a Top-down analysis.

 

Why Variance is important?

• Risk-reward is being given less weight when allocating a portfolio.

• Intensified geopolitical conflicts.

• The slow rise in earnings.

• The growth story of India.

• FPI Movements.

• Elevated valuations.

 

ICICI Prudential Mutual Fund Details

• It is one of India's most renowned mutual fund companies. In terms of AUM, it is one of the top three AMCs in the country.

• ICICI In 1993, Prudential AMC was established. In 1998, Prudential Plc and ICICI Bank changed it to a joint venture.

• It had over 97 lac investors and an AUM of over Rs. 7,81,394.30 crore. Over 120 mutual fund schemes, including debt, hybrid, and equity plans, are offered by the ICICI AMC.

 

Scheme Overview

The ICICI Prudential Equity Minimum Variance Fund NFO can be subscribed with a minimum subscription amount of Rs.5000.

If you have missed participating in the NFO and now want to invest in the same Scheme on a continuous basis, then within 5 business days from the date of allotment, when the Scheme will reopen; you will have the option to participate and invest directly in the Mutual Fund by spending at NAV based price by logging on to your Demat account and search for “ICICI Prudential Equity Minimum Variance Fund” or directly with the AMC or simply click the ‘Banner’ below.

 

Fund Investment Objective 

Using a diverse basket of equity and equity-related securities, the goal is to reduce portfolio volatility. Nevertheless, there is no guarantee or assurance that the Scheme's investment goal will be met.

Asset Allocation (% of Total Assets) of the Scheme's portfolio will be as follows:

Peers of ICICI Prudential Equity Minimum Variance Fund

Since this scheme is a new scheme, hence no comparable data on its past performance against its peers is available.

 

Risk Factors In Such Funds

• The aim of the program will mainly be an investment in equity and equity-related instruments along with some sectoral concentration (those weights may vary from the index). The possibility to tilt sectoral weights substantially above the benchmark index in certain sectors, statistically, may increase concentration risks.

• Government policy changes in general and changes in tax benefits available for mutual funds, in particular, may affect the returns to investors in the Schemes or prospects of the Company in any particular sector.

• Depending on the investment pattern shown in typical conditions, the scheme's performance may deviate from the benchmark index to the degree of investments held in the debt segment.

 

Past Performance of Minimum Variance Funds

 

ICICI Prudential Equity Minimum Variance Fund Managers:

• Mr. Vaibhav Dusad. 

• Ms. Nitya Mishra.

Conclusion

ICICI Prudential Equity Minimum Variance Fund is a fresh NFO, targeting long-term capital appreciation along with reducing the volatility of the portfolio. It seeks to provide risk-adjusted returns through an investment in a diversified portfolio of large-cap stocks. This type of investment carries a high risk and hence would appeal to investors looking for optioned equity exposure. Look into your risk appetite and your investment objectives before investing in this NFO.

Disclaimer: This NFO analysis is provided solely for informative reasons and should not be construed as investment advice. Hence this is not investment advice or suggestion. Always conduct research and talk with a financial advisor before investing.