ICICI Prudential Mutual Fund has launched a new fund offer (NFO) ICICI Prudential Nifty Next 50 ETF. The NFO was launched on 13th August and will close on August 16. The Nifty Next 50 is the bottom half (50 companies) of the Nifty 100. In other words, it is the Nifty 100 excluding the Nifty 50.
ICICI Prudential Mutual fund already has an index fund which tracks the Nifty Next 50 Index. An ETF will allow investors with demat and trading accounts to participate in the index on a real-time basis. ETF units, unlike ordinary mutual funds (including index funds) are actively traded on the stock exchanges.
As of 31st July, the Nifty Next 50 had one-year returns of 6.33% and five-year returns of 21.61% CAGR. The Index is led by companies like Britannia Industries, JSW Steel, Godrej Consumer Products and Motherson Sumi Systems. Sector-wise, the index is dominated by consumer goods (27.69%), financial services (21.09%) and automobiles (11.09%).
ICICI Prudential Nifty Next 50 ETF will be required to invest 95%-100% of its assets in the securities comprising the Nifty Next 50. The balance 5% can be placed in debt or money market instruments. The scheme will be managed by Kayzad Eghlim who also manages various other ICICI Prudential ETFs such as the ICICI Pru iWin Nifty ETF and Sensex ETF as well as Bharat 22. However, the fund manager plays a relatively small role in an ETF.
NFO Period: 13th to 16th August
Benchmark: Nifty Next 50 TRI (Total Returns Index)
Fund Manager: Kayezad Eghlim
Minimum Investment Amount: Rs 5,000