Publish Date:
ICICI Prudential Mutual Fund has launched a new thematic fund -ICICI Prudential Business Cycle Fund.
It is an open ended equity scheme following business cycles-based investing theme.
The investment objective of the scheme is to generate long-term capital appreciation by investing with focus on riding business cycles through allocation between sectors and stocks at different stages of business cycles.
However, there can be no assurance or guarantee that theinvestment objective of the scheme would be achieved.
Under normal circumstances, 80% to 100% of the funds portfolio will be invested in Equity & Equity related instruments selected on the basis of businesscycle. It can also invest upto 20% of its assets in other Equity & Equity related instruments (including foreign securities), Preference shares or any other assetas may be permitted by SEBI fromtime to time.
The fund can also hold up to 20% of its assets in Debt & Money Market Instrumentsincluding Units of Debt orientedmutual fund schemes, whereas up to 10% of its assets can be held in Units issued by REITs and InvITs.
ICICI Prudential Business Cycle Fund will be a diversified equity fund which will invest predominantly in equityand equity related securities with focus on riding business cycles through dynamicallocation between various sectors and stocks at different stages of business cycles.
As per the Scheme Information Document (SID), Business cycles in an economy are typically characterized by the fluctuations ineconomic activity measured by real GDP growth and othermacroeconomic variables. A business cycle is basically defined in terms of periods ofexpansion and contraction. During expansions, the economy is growing in real terms(i.e. excluding inflation), as evidenced by increases in indicators like employment,industrial production, sales and personal incomes. During Contraction, the economy iscontracting, as measured by decreases in the above indicators.
The Scheme would aim to deploy the business cycle approach ininvesting by identifying economic trends and investing in the sectors and stocks that arelikely to outperform at any given stage of business cycle.
The fund manager will considereconomic parameters (like Current Account Deficit, fiscal deficit, interest rates, inflation),investment indicators (like investment in capex, new projects cleared, etc.), business andconsumer sentiment (purchasing manager index, business confidence index, sales ofvarious consumer discretionary products, etc.) to decide on the expansion or contractionphase.
ICICI Prudential Business Cycle Fund’s performance will be benchmarked against Nifty 500 TRI (Total Return Index).
The fund will be managed by MrAnish Tawakley andMrIhab Dalwai.MrManish Banthiawill be the co-fund manager involved in identifying business cycles. Ms.Priyanka Khandelwal is the dedicated fund manager for overseas investments.
The NFO opens for subscription on December 29, 2020 and closes on January 12, 2021. The scheme will reopen for continuous Sale and Repurchase within 5 business days from the date of allotment.
The fund’s NAV is priced at Rs 10/- per unit during the NFO period. The minimum subscription amount is Rs 5,000 and in multiples of Rs 1 thereafter.
The fund offers Regular Plan and Direct Plan having Growth Option and Dividend Option (Dividend Re-investment and Dividend Pay-out facilities).