ICICI Prudential Mutual Fund To Launch ICICI Prudential Equity Minimum Variance Fund

ICICI Prudential Mutual Fund is introducing the ICICI Prudential Equity Minimum Variance Fund, an open-ended equity fund designed to provide a stable investment experience by focusing on low-volatile, large-cap stocks. The New Fund Offer (NFO) period is scheduled from November 18, 2024, to December 2, 2024. The fund primarily targets companies within the Nifty 50 Index, aiming to reduce portfolio volatility while providing long-term capital appreciation.

Features of the Fund

Investment Strategy

The ICICI Prudential Equity Minimum Variance Fund follows a minimum variance strategy, focusing on reducing overall portfolio risk by investing in low-variance stocks. The selection criteria include factors like volatility, downside risk, maximum drawdown, and upside potential. Additionally, the portfolio will be reviewed periodically to make sure the risk levels remain below the benchmark variance.

To strengthen portfolio stability, the fund may also employ derivative and hedging strategies, including covered call options, interest rate futures, and other derivative instruments. Moreover, up to 20% of the portfolio could be allocated to global equity instruments, such as ADRs, GDRs, and foreign securities, as per SEBI guidelines.

Objective & Risk 

The fund’s primary goal is to generate long-term capital appreciation by investing in a diversified equity portfolio while minimizing risk. However, there is no guarantee that this objective will be achieved.

The scheme is managed by Vaibhav Dusad, with a risk level categorized as Very High. Investors should note that while the fund aims to reduce volatility, equity investments inherently carry market-related risks.

Conclusion: For investors seeking exposure to the equity market with stability, the ICICI Prudential Equity Minimum Variance Fund offers a structured approach to managing volatility. However, potential investors should assess their risk tolerance and consult financial advisors before committing, given the fund’s high-risk classification.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.