ICICI Prudential Mutual Fund launches consumption-themed ETF

The ICICI Prudential Consumption ETF, which will close for subscription on October 25, will provide exposure to a diversified portfolio of companies representing domestic consumption. Kayzad Aglim and Nishit Patel will be the fund managers of the scheme.

According to India’s second largest asset manager, India’s population is continuously increasing with every passing year, which will increase the level of consumption in every household, thus improving and increasing the consumption sector.

The minimum investment during the New Fund Offer (NFO) period is ₹1,000 and in multiples of ₹1, thereafter, with zero exhaust load.

Speaking at the launch, Chintan Hariya, Head – Product Development & Strategy, ICICI Prudential AMC said, “Through this offering, an investor gets exposure to 30 large and mid-cap companies that are used on a daily basis. engaged in goods and services. to all age groups. With India being one of the fastest growing economies, there is huge potential for growth in the domestic and industrial consumption sectors. An investor can consider this offering as part of his equity allocation.”

The company in a release highlighted that in terms of return potential, the Nifty India Consumption Total Return Index (TRI) has outperformed the Nifty 50 TRI four times out of eight as of 2020.

The Nifty India Consumption Index is designed to reflect the behavior and performance of a diverse portfolio of companies representing the domestic consumption sector, including consumer non-durables, healthcare, auto, telecom services, pharmaceuticals, hotels, media and Areas like entertainment etc. are included. .

In terms of sectoral composition, consumer goods had the largest representation in the Nifty India Consumption Index at 57.91%, followed by automobiles at 17.06% and consumer services at 9.49% as of September 30.

In terms of components, Hindustan Unilever Ltd had the highest weighting at 10.16%, followed by ITC Ltd at 10.08%, Bharti Airtel Ltd at 9.24%, Asian Paints at 8.32% and Maruti Suzuki India Ltd at 5.55%.

Consumption as a subject has been largely unaffected by the Covid-19 induced slowdown in the economy over the past 18 months.

To capture this theme, SBI Mutual Fund launched SBI ETF Consumption in July, while Axis Mutual Fund launched Axis Consumption ETF in September. Both these funds are based on Nifty India Consumption Index.

Nippon India Mutual Fund is one of the earliest consumption themed ETFs launched in 2014. ₹26 crore has given returns of 51.47%, 19.07%, 15.25% and 14.35% on one-, three-, five- and seven-year basis respectively.