ICICI Pru MF has launched Innovation Fund NFO which would be following innovation theme. This fund would open for subscription on 10th April, and closes on 24th April, 2023. This is unique mutual fund which does not invest in specific index or sector or segment, however follows an innovation theme. In this article, we would provide ICICI Prudential Innovation Fund NFO issue details and whether you should invest or avoid.
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ICICI Prudential Innovation Fund – NFO issue details
This is an open-ended mutual fund equity scheme. Here are the NFO issue details.
|Scheme reopens for continuous purchase/sale||Within 5 business days|
|Minimum Lumpsum||Rs 5000|
|Minimum SIP||Rs 500 for 12 months|
|NAV of the fund||Rs 10 during NFO period|
|Exit Load||1% for redemption within 360 days|
|Benchmark||NIFTY 500 TRI|
|Fund Manager||Vinayak Jayanath|
What is the investment objective of ICICI Prudential Innovation Fund NFO?
The scheme is an open ended thematic fund. The objective of the scheme is to generate long term capital appreciation by predominantly investing in equity & equity related securities of companies and units of global mutual funds/ETFs that can benefit from innovation strategies and theme.
What is the allocation pattern in this mutual fund scheme?
Here is the allocation pattern of this scheme.
|Type of instruments||Min %||Max %||Risk Profile|
|Equity & Equity related securities of
companies adopting innovation
strategies and themes & Overseas
Securities adopting innovation
strategies and themes
|Other Equity & Equity related
|Debt and Money Market Securities||0%||20%||Low to Medium|
|Units issued by REITs and InvITs||0%||10%||Very high|
Why to invest in the ICICI Prudential Innovation Fund NFO?
Here are a few reasons to invest in this fund.
1) This fund invests in companies which are utilizing new technologies and process.
2) This fund also plans to invest in companies which are launching products or services which are relatively new.
Such companies can provide significant growth in short to medium term.
Why should you avoid ICICI Prudential Innovation Fund NFO?
One should consider some of these risk factors / negative factors before investing.
1) The scheme invests majorly in equity instruments of companies engaged in or expected to benefit from innovation theme. It is possible that such innovation are short term and/or do not crystalize in a manner commensurate with expectations.
2) The scheme is thematic in nature, hence will be affected by the risks associated with the innovation theme. Owing to high concentration risk for thematic scheme, risk of capital loss is high. There is an element of unpredictable market cycles that could run for extended periods. Loss of value due to obsolescence, or regulatory changes coupled with structural rigidity of the Scheme can lead to permanent loss of capital. Thus, investing in a thematic fund could involve potentially higher volatility and risk.
3) This scheme invests up to 20% in foreign equity, ADR/GDRs etc., where there is geo political risks and foreign exchange converison risk.,
4) It is not possible to check historical performance for such thematic mutual funds, hence we do not know whether this new MF would perform well in future or not.
5) Investors should read all risk factors before investing in such schemes.
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Should you invest in ICICI Prudential Innovation Fund NFO?
ICICI Prudential Innovation Fund follows innovation theme. Such schemes would invest in companies that use new technologies or invest in companies that launch products or services which are relatively new. Investing in such companies can provide superior gains in short to medium term.
On the other side, there is no guarantee that companies that launch new products or services would really benefit in short term. Investors cannot assess how this category of funds would perform in the medium to long term.
If you are high risk investor and excited about investing in such innovation theme based mutual fund schemes, you can invest. Otherwise, one can avoid such funds.
ICICI Prudential Innovation Fund NFO analysis is done based on SID on SEBI website
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