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ICICI Prudential Mutual Fund launches new Fund of Funds (FOF)

ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Nifty Low Vol 30 ETF FOF. The New Fund Offer (NFO) opens on March 23, 2021 and closes on April 06, 2021. The offering aims to provide returns that closely correspond to the returns provided by its benchmark Nifty 100 Low-Volatility 30 Index, subject to tracking errors.

By tracking the least volatile stocks in the Nifty 100 Index, the scheme offers wealth creation opportunities with a lower level of volatility. Historically, The Nifty 100 Low Volatility 30 Index has provided returns in the range of 12-16% CAGR* over last 5 years. (Data Source: MFI Explorer. Data as on February 28, 2021). The scheme allows investors without a Demat account to invest in a smart Beta ETF with Equity taxation through lump sum or SIP.

Speaking on the launch of the product, Mr. Nimesh Shah, MD & CEO, ICICI Prudential AMC said, “Through ICICI Prudential Nifty Low Vol 30 ETF FOF, an investor gets access to a factor-based smart beta ETF that limits downside risk. Our aim is to help investors to limit the impact of market volatility and to gain exposure to the least volatile bluechip companies in a simple and easy manner. The Scheme aims to invest in large cap and low volatility blue chip companies of different sectors. Because of the FOF structure, retail investors can invest through SIP.”

ICICI Prudential Nifty Low Vol 30 ETF FOF invests in ICICI Prudential Nifty Low Vol 30 ETF that replicates the Nifty 100 Low Volatility 30 Index in the same proportions. The Nifty 100 Low Volatility 30 Index consists of 30 stocks with least volatility selected from the Nifty 100 index. The weights of the stocks are based on volatility which is measured as standard deviation of stock returns over a one year period.  The individual stock weight is capped at 3%. The top three sectors for the index comprises of Software, Personal Care and Cement. The index is rebalanced on a quarterly basis.

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