NEW DELHI :
ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Alpha Low Vol 30 ETF Fund of Funds (FOF), an open-ended FOF scheme investing in ICICI Prudential Alpha Low Vol 30 ETF. The offering aims to provide returns before expenses that closely correspond to the total return of the underlying index, that is, Nifty Alpha Low Volatility 30 TRI, subject to tracking errors. The new fund offer (NFO) opens on 1 September 2021, and closes on 15 September 2021. The benchmark for this FOF is Nifty Alpha Low Volatility 30 TRI.
Speaking on the launch of the product, Chintan Haria, head-product development & strategy, ICICI Prudential AMC, said, “Multi-style, factor-based funds, also known as smart beta strategy funds, are gaining popularity among investors globally for the synergies of benefits they have to offer in terms of enhanced diversification, reduced volatility, alpha generating opportunities, etc. ICICI Prudential Alpha Low Vol 30 ETF FOF provides investors exposure to a combination of alpha generation opportunities with reduced volatility by investing in ICICI Prudential Alpha Low Vol 30 ETF. This multi-style factor exposure endeavours to provide growth with stability to its investors. Investors looking to create wealth over the long term via multi-style factor strategy may opt to invest in ICICI Prudential Alpha Low Vol 30 ETF FOF.” Through this FOF, investors can access a portfolio of stocks from various sectors, based on top combination of alpha and low volatility. It intends to counter the cyclical theory of single factor index structure strategy. While investing through FOF, an investor without a demat account, too, can invest in an ETF through lump sum or SIP.
The Nifty Alpha Low Volatility 30 index consists of 30 stocks selected from Nifty 100 and Nifty Midcap 50. The weights of the stocks are derived from alpha and low volatility factor scores with individual stock weight capped at 5%. The index methodology is factor-weighted and rebalanced semi-annually. The top three sectors in the index are consumer goods (40.8%), IT (21.6%) and pharma (16.8%). An FoF allows investors to invest in an ETF without having to open a demat and trading account.
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