ICICI Mutual Fund announced the launch of the ICICI Prudential Nifty 200 Quality 30 ETF, an open-ended exchange-traded fund (ETF) tracking the Nifty 200 Quality 30 Index.
The scheme opened for public subscription on July 21, 2023, and will close on August 04, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This is an open-ended ETF scheme tracking the NIFTY200 Quality 30 Index.The offering aims to provide returns that correspond to the returns provided by the Nifty 200 Quality 30 Index, subject to tracking errors.
Speaking on the launch of the product, Chintan Haria, Head Investment Strategy, ICICI Prudential AMC said, “ICICI Prudential Nifty 200 Quality 30 ETF is a smart beta offering based on quality as a factor. The offering provides investors with an opportunity to diversify equity investments across various sectors and in companies having strong cash flows. The index has historically provided better dividend yield than Nifty 200 TRI and Nifty 50 TRI.”
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to provide returns before expenses that correspond to the total return of the underlying index subject to tracking errors. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
Minimum | Maximum | ||
Equity and equity-related securities of companies constituting the underlying index (NIFTY200 Quality 30 Index) | 95% | 100% | Very High |
Money market instruments including TREPs | 0% | 5% | Low to Medium
|
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) in India have launched similar ETFs, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
Mutual Fund House | Name of the fund |
SBI Mutual Fund | SBI Nifty 200 Quality 30 ETF |
Aditya Birla Sun Life Mutual Fund | Aditya Birla Sun Life Nifty 200 Quality 30 ETF |
| Source: MoneyControl | |
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against NIFTY200 Quality 30 TRI.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. There will be no “Exit Load” for units sold through the secondary market on the BSE/NSE. Investors shall note that the brokerage on sales of the units of the scheme on the stock exchanges shall be borne by the investors.
Q. Who will manage this scheme?
The investments under the scheme will be managed by Kayzad Eghlim and Nishit Patel.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in theScheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
