ICICI Prudential Mutual Fund on Monday announced the launch of ICICI Prudential Innovation Fund, an open-ended thematic equity scheme which will predominantly invest in equity, equity related securities of companies and units of global mutual funds/ETFs that can benefit from innovation strategies and themes. The new fund offer (NFO) is available for subscription till April 24, 2022.
The scheme will follow a bottom up approach and can take exposure to companies involved in product/services/solution related innovation. The scheme can invest across market cap, basis suitable opportunities, the fund house said.
Speaking on the launch of the product, Chintan Haria, Head - Investment Strategy at ICICI Prudential AMC said, “As countries look to become increasingly self-sufficient in terms of resources, innovation as a theme is likely to do well going forward globally and domestically. With the deployment of 5G technology, a wide gamut of sectors/industries stand to benefit and India already has a robust ecosystem in place for nurturing innovation.”
"Through this offering an investor will have access to companies involved in product/service/solution related innovation both in India and overseas. Given that innovation can happen anywhere, our research team will track sector/theme specific trends," Haria said.
The scheme will invest a minimum of 80 percent in companies adopting innovation strategies and themes and overseas securities adopting innovation strategies and themes. The scheme will be both sector and market-cap agnostic.
The scheme may invest up to 20 percent of its net assets in ADR/GDR / Foreign securities/Mutual Funds/ETFs, the fund house said.
Undercurrents favoring innovation theme
Pandemic: Importance of supply chain diversification was best realized during the pandemic leading to good scope for innovation.
Geo-Politics: Uncertainties around Russia-Ukraine War, US-China tensions have probed countries to look for better options to reduce dependencies.
Inflation: As countries look to counter high inflation with domestically manufactured products, innovation could do well.
Normalizing interest rate environment: As globally and domestically, Central Banks seem to approach fag end of interest rate hike cycle, growth stocks may perform well. Given that the scheme is likely to have a growth bias, this strategy tends to do well in a normalizing interest rate environment.
The scheme will be managed by Anish Tawakley and Vaibhav Dusad. Overseas investment will be managed by Sharmila D’Mello. The benchmark of the scheme is Nifty 500 TRI.
