NFO Alert: ICICI Prudential Mutual Fund launches Energy Opportunities Fund; all you need to know

ICICI Prudential Mutual Fund announced the launch of the ICICI Prudential Energy Opportunities Fund. The scheme opened for public subscription on July 02, 2024, and will close on July 16, 2024.

Abeer Ray
First Published5 Jul 2024, 06:58 PM IST
ICICI Prudential Mutual Fund launches ICICI Prudential Energy Opportunities Fund as a part of its new fund offers.
ICICI Prudential Mutual Fund launches ICICI Prudential Energy Opportunities Fund as a part of its new fund offers.

ICICI Prudential Mutual Fund announced the launch of the ICICI Prudential Energy Opportunities Fund, an open-ended equity scheme following the energy theme.

The scheme opened for public subscription on July 02, 2024, and will close on July 16, 2024. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme following the energy theme. This product is suitable for investors seeking

  • Long-term wealth creation
  • Investment in instruments of companies engaged in and/or expected to benefit from the growth in traditional & new energy sectors & allied business activities.

Speaking at the launch, ED & CIO of ICICI Prudential AMC and the fund manager of the offering, Sankaran Naren, observed, “Energy is the cornerstone of industrial growth and economic development. With the ongoing transition towards renewable energy and the government's focus on achieving net-zero emissions, the energy theme offers significant growth potential. Through this scheme, investors can gain access to a diversified portfolio of companies across the energy value chain.”

What is the main objective of investing in this fund?

The investment objective of the scheme is to provide investors with opportunities for long-term capital appreciation by investing in equity and equity-related instruments of companies engaging in activities such as exploration, production, distribution, transportation, and processing of traditional & new energy including but not limited to industries/sectors such as oil & gas, utilities, and power.

However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved.

Talking about valuations and recent performance, Naren adds, “Although the Nifty Energy Index has outperformed the broader market recently, the valuations remain reasonable, and investors may consider this scheme from a long-term perspective.”

 

Also Read | 4 best energy sector mutual funds to invest in 2024

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of 5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Instruments

Indicative allocations (% of total assets)

Risk Profile

Minimum

Maximum

Equity & equity-related instruments of companies engaged in energy (traditional/new) and allied sectors

80%

100%

Very High

Other equity and equity-related securities

0%

20%

Very High

 

Debt and Money market instruments

0%

20%

Low to Medium

 

Units issued by REITs/ InvITs

0%

10%

Medium to High

 

Are there similar mutual funds in the market?

To date, other asset management companies (AMCs) have launched similar mutual funds. These include: 

Mutual Fund House

Name of the fund

5-year returns 

(in %)

DSP Mutual Fund 

DSP Natural Resources and New Energy Fund

23.33

Tata Mutual Fund

Tata Resources & Energy Fund

26.21

SBI Mutual Fund

SBI Energy Opportunities Fund

-

Source: AMFI (As of July 05, 2024)

How will the scheme benchmark its performance?

This scheme primarily invests in securities that are constituents of the Nifty Energy TRI.

The Nifty Energy Index includes companies belonging to petroleum, gas, and power sectors. The Index comprises 10 companies listed on the National Stock Exchange of India (NSE).

The scheme is benchmarked to Nifty Energy TRI as the index constituents suitably reflect the underlying scheme’s universe in the best possible manner.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” will be charged as

• 1% of applicable Net Asset Value - If the amount sought to be redeemed or switched out is invested for a period of up to three months from the date of allotment

• Nil - If the amount, sought to be redeemed or switched out is invested for a period of more than three months from the date of allotment.

 

Also Read | SBI Mutual Fund launches SBI Energy Opportunities Fund; all you need to know

Who will manage this scheme?

The investments under the scheme will be managed by Sankaran Naren and Nitya Mishra. The overseas investments of the scheme will be managed by Sharmila D’Mello.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

 

 

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First Published:5 Jul 2024, 06:58 PM IST
HomeMutual FundsNFO Alert: ICICI Prudential Mutual Fund launches Energy Opportunities Fund; all you need to know

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