ICICI Prudential Mutual Fund announced the launch of an index fund and ETF, namely, ICICI Prudential Nifty200 Value 30 ETF and ICICI Prudential Nifty200 Value 30 Index Fund. The Exchange-Traded Fund and the Index Fund both track the Nifty200 Value 30 Index, which consists of 30 stocks selected from the Nifty 200 Index. The Nifty 200 index represents about 82 per cent of the free float market capitalization of the stocks listed on the NSE and includes all companies forming part of the Nifty 100 and Nifty Full Midcap 100 index.
NFO Details
The New Fund Offer (NFO) for both schemes will run from September 30, 2024, to October 14, 2024. During the NFO period, the minimum application amount for both funds is Rs 100, with additional investments allowed in multiples of Rs 1.
Both the ETF and index fund do not impose any exit load.
Investment Philosophy
Both offerings belong to the smart beta category, utilizing a factor-based strategy to offer investors a low-cost, value-driven investment approach. The 30 stocks are chosen from the Nifty 200 based on the value score, which is calculated using key valuation factors. The index is rebalanced semi-annually, so it could entirely align with market trends and valuation principles.
Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC stated, "At a time when investors are seeking diversified strategies for long-term growth, value investing remains a crucial component of a well-rounded portfolio."
The schemes are based on the concept of value investment, which aims to target undervalued stocks. The investors get access to 30 companies from diverse sectors, both large-cap and mid-cap space. Investors will get exposure to Financial Services, Oil, Gas & Consumable Fuels, Metals & Mining, Power, Construction Materials, Chemicals and Telecommunication.
The fund house said the Nifty 200 Value 30 TRI has outperformed the Nifty 200 TRI six times during the last ten years.
The schemes are well poised to adjust to prevailing circumstances in the market. For example, the index composition was overweight on financial services in 2023 and 2024 since the value score of the sector's stocks was higher. The midcap stocks had more value in 2022, but in 2019, the exposure to midcap stocks was the least in the last five years.
