NFO Review: ICICI Prudential Long Term Wealth Enhancement Fund, an ELSS fundICICI Prudential Long Term Wealth Enhancement Fund is a three-year closed-ended ELSS (Equity Linked Savings Scheme) Fund. It is eligible for a deduction up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The fund will invest at least 80% of its corpus in equities across market capitalisation.   

The fund will be managed by Sankaran Naren, the long-standing Chief Investment Officer (CIO) of ICICI Prudential Mutual Fund and Rajat Chandak who has a decade’s worth of experience with ICICI Mutual Fund as a fund manager and investment analyst.

Investment Approach

Asset Allocation

The Fund will allocate money between large, mid and small caps considering liquidity, trading volumes and market scenario (bear markets tend to cause less damage to large caps).

Sectoral Allocation (Top-Down Approach)

The Fund will set its sectoral exposure considering the macroeconomic scenario, policy changes, global trends, relative valuation vis-a-vis other sectors and risk premium of the sector.

Stock Selection (Bottom-up Approach)

The Fund will follow a bottom-up approach to stock selection considering relative valuation, management quality, business fundamentals and risk and ratios such as price to earnings and price to book.

RupeeIQ Take:

Both open and closed-ended ELSS funds have a three-year lock-in and hence this fund adds a ‘second layer’ of lock-in through its closed-ended nature. This will further reduce the impact of potentially volatile inflows and outflows on the fund manager. From the investor’s point of view, the lock-in remains the same and hence liquidity is not compromised.

However, the fund has no distinctive investment theme. Being a closed-ended fund, it also has no track record to evaluate it.  

Key Details

NFO Period: December 22nd, 2017 to March 21st, 2018

Tenure: 3 years

Type: ELSS/Tax Saving

Tenure: 3 years

Options: Growth and Dividend Payout

Fund Managers: Sankaran Naren and Rajat Chandak

Minimum Investment: Rs 500

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Note: Mutual fund investments are subject to market risks. Read all scheme related documents carefully. Talk to your financial advisor before investing.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.