ICICI Prudential Mutual Fund Launches Consumer-Focused ETF

NEW DELHI : Asset management company ICICI Prudential Mutual Fund has launched an exchange traded index fund that tracks the Nifty India consumer index.

The ICICI Prudential Consumption ETF, which will close underwriting on October 25, will seek to provide exposure to a diverse portfolio of companies representing domestic consumption. Kayzad Eghlim and Nishit Patel would be the fund managers of the program.

According to India’s second largest asset manager, India’s population is steadily increasing year by year, which will increase consumption levels in every household thereby improving and strengthening the consumer sector.

The minimum investment during the New Fund Offer Period (NFO) is ??1,000 and in multiples of ??1, then, with zero output load.

Speaking on the launch, Chintan Haria, Head of Product Development and Strategy, ICICI Prudential AMC said: to all age groups. With India being one of the fastest growing economies, there is enormous potential for growth in the domestic and industrial consumption segments. An investor may view this offer as part of his equity allocation. “

In a statement, the company pointed out that in terms of return potential, the Nifty India Consumption Total Return Index (TRI) outperformed the Nifty50 TRI four out of eight times through 2020.

The Nifty India Consumer Index is designed to reflect the behavior and performance of a diversified portfolio of companies representing the domestic consumer sector which includes sectors such as non-durable consumer goods, healthcare, automotive , telecommunications services, pharmaceuticals, hotels, media and entertainment, etc. .

In terms of sector composition, consumer goods were the most represented at 57.91% in The Nifty India consumer index, followed by automobiles at 17.06% and consumer services at 9.49% , to September 30.

Hindustan Unilever Ltd had the highest component weight at 10.16%, followed by ITC Ltd at 10.08%, Bharti Airtel Ltd. 9.24%, Asian Paints 8.32% and Maruti Suzuki India Ltd. at 5.55%.

Consumption as a theme has hardly been affected by the covid-19-induced economic downturn over the past 18 months.

To capture this theme, SBI Mutual Fund launched SBI Consumption ETF in July, while Axis Mutual Fund in September launched Axis Consumption ETF. These two funds are based on the Nifty India consumer index.

Nippon India Mutual Fund owns one of the first consumer-themed ETFs which was launched in 2014. The fund with assets of ??26 crore generated returns of 51.47%, 19.07%, 15.25% and 14.35% over one, three, five and seven years, respectively.

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