ICICI Prudential Mutual Fund has announced the launch of the ICICI Prudential Nifty IT Index Fund. This is an open-ended scheme that invests in a basket of Nifty IT stocks, and aims to achieve the returns of the index, subject to tracking error.
The new fund offer (NFO) opened for subscription on July 28, 2022 and will close on August 11, 2022.
According to a press release by the mutual fund house, investors can start with a minimum investment of Rs 1,000 and thereafter in multiples of Re. 1. The minimum additional application amount for switch-ins is Rs. 1,000 and thereafter in any amount.
According to ICICI Prudential Mutual Fund, since this is an index fund, investors can use a systematic investment plan (SIP) or a systematic transfer plan (STP). During the period, investors can invest daily, weekly, fortnightly, or monthly through SIP of Rs 1,000, and thereafter in multiples of Re. 1. The applicability of the minimum amount of instalment mentioned is at the time of registration only.
It further said they launched the ICICI Prudential Nifty IT Index Fund to enable investors to participate in the growth story of the IT and the tech sector without having to bother about deciphering the complexities of the IT sector. The top 10 index constituents include reputed companies in the IT sector, such as, Tata Consultancy Services Ltd, Infosys Ltd., Tech Mahindra Ltd, HCL Technologies Ltd, Wipro Ltd, Mphasis Ltd, MindTree Ltd, Larsen & Toubro Infotech Ltd, Coforge Ltd and L&t Technology Services Ltd, the press release added.
For the uninitiated, index funds are mutual funds that replicate the underlying index.
The Nifty IT has outperformed the other sectors over a 3-year horizon. Nifty IT TRI has outperformed the Nifty 50 TRI five out of 10 times till 2021. The compounded annualised growth rate (CAGR) returns of Nifty IT is better than Nifty 50 TRI with 13.6 per cent returns in 15 years in the former, and 10.3 per cent returns in the latter one. Incidentally, the SIP returns in the former fund after five years account to 22.7 per cent and 12.2 per cent for the latter one.
