ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Nifty Bank Index Fund, an open-ended index fund replicating the Nifty Bank Index. The scheme provides exposure to 12 most liquid and well-capitalised stocks from the banking sector. Speaking on the launch of the product, Mr. Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC said, “The Indian banking sector holds tremendous growth potential given the robust demand in their services, constant innovation in terms of improving operational efficiency along with improving business fundamentals owing to various reforms in this space. Also, banks and financial services form the highest weightage in broader market indices (Nifty 500 and Nifty 50) which emphasizes its importance in contributing to broader market trends.”
Over the last decade, market capitalization of private banks has seen a quantum jump on account of their improving efficiency, customer-centric approach, technological superiority, and appropriate risk management measures. As a result, Nifty Bank TRI has outperformed both Nifty 50 TRI and Nifty 500 TRI in 6 out of 10 years.
The road thus far has been paved by various reforms which has contributed towards reducing the NPA ratio in the recent years. Going forward, the increase in working population and growing disposable income too are contributing factors which help improve the demand for banking and related services. Adding to this, by 2025, India’s fintech market is expected to reach Rs. 6.2 trillion (US$ 83.48 billion). (Source: Source:Ibef.org)
Why should investors consider ICICI Prudential Nifty Bank Index Fund?
Banks play the role of intermediation by accepting deposits and lending the money to those in
- need thereby facilitating optimum utilization of scarce resources
- Asset quality of banks is improving due to reforms which may lead to risk reduction and higher
- Nifty Bank index has captured the GDP growth of the country due to it being the recipient of benefit
- from all sectors of the economy
- For a minimum investment amount of INR 5000, investors get the opportunity to invest in biggest
- banks of the country
- Investors can avail the benefit of Systematic Investment Plan (SIP), Systematic Transfer Plan (STP)
The above factors are not exhaustive. Past performance may or may not be sustained in future.