ICICI Prudential launches ICICI Prudential Nifty Low Vol 30 ETF FOF

ICICI Prudential Mutual Fund has recently announced the launch of ICICI Prudential Nifty Low Vol 30 ETF FOF, which is a smart beta fund of funds (FoF). The new fund offer (NFO) opens for subscription on March 23 and closes on April 06, 2021.  

This scheme invests in ICICI Prudential Nifty Low Vol 30 ETF that replicates Nifty 100 Low Volatility 30 Total Returns Index (TRI) in the same proportions. Nifty 100 Low Volatility 30 TRI consists of the top 30 stocks based on market capitalisation from Nifty 100, having the least volatility. The weights of the stocks are based on volatility, which is measured as the standard deviation of stock returns over a one-year period, where individual stock weight is capped at 3 per cent. The index is said to be rebalanced on a quarterly basis. Further, though it aims to provide returns that closely correspond to the returns of its benchmark, it is subject to tracking errors. 

As this fund tracks the least volatile stocks in Nifty 100, the scheme offers wealth creation opportunities with a toned-down volatility level. The average three-year rolling returns of Nifty 100 Low Volatility 30 TRI stood at 14.8 per cent. 

Speaking on the launch of the product, Nimesh Shah, MD & CEO of ICICI Prudential AMC said, “Through ICICI Prudential Nifty Low Vol 30 ETF FOF, an investor gets access to a factor-based smart beta ETF that limits downside risk. Our aim is to help investors limit the impact of market volatility and to gain exposure to the least volatile blue-chip companies across sectors in a simple and easy manner. The scheme allows investors without a Demat account to invest in a smart beta ETF with equity taxation through lump sum or SIP.”