ICICI Prudential Mutual Fund Introduces ICICI Prudential FMCG ETF

Jul 20, 2021

ICICI Prudential Mutual Fund has launched a new scheme - ICICI Prudential FMCG ETF.

It is an open ended Exchange Traded Fund that will track the NIFTY FMCG Index.

Accordingly, the investment objective of the scheme is to provide returns before expenses that closely correspond to the total return of the underlying index subject to tracking errors.

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

Under normal circumstances the scheme will invest 95% to 100% of its assets in Securities constituting NIFTY FMCG Index. A very small portion (0% to 5% of its assets) may be kept in Money market instruments including TREPs, Units of debt schemes and Units of Debt ETFs.

As per the scheme information document, ICICI Prudential FMCG ETF is a passively managed exchange traded fund. The corpus of the Scheme will be invested predominantly in stocks constituting the underlying index in the same proportion as in the Index and endeavor to track the benchmark index.

A very small portion (0-5% of the Net Assets) of the fund may be kept liquid to meet the liquidity and expense requirements. The fund may also use various derivatives and hedging instruments from time to time, as would be available and permitted by SEBI, in an attempt to protect the value of the portfolio and enhance Unitholders’ interest.

The performance of the Scheme may not be commensurate with the performance of the underlying index on any given day or over any given period. Such variations are commonly referred to as the tracking error. The fund intends to maintain a low tracking error by closely aligning the portfolio in line with the index.

The stocks comprising the underlying index are periodically reviewed by Index Service Provider. A particular stock may be dropped or new securities may be included as a constituent of the index. In such an event, the Fund will endeavor to reallocate its portfolio but the available investment/ disinvestment opportunities may not permit precise mirroring of the underlying index immediately.

The portfolio shall be rebalanced within 7 days to ensure adherence to the asset allocation norms of the Scheme. Similarly, in the event of a constituent stock being demerged / merged / delisted from the exchange or due to a major corporate action in a constituent stock, the fund may have to reallocate the portfolio and seek to minimize the variation from the index. In such events, it may be more prudent for the fund to take exposure through derivatives of the index itself or its constituent stocks in order to minimize the long term tracking error

ICICI Prudential FMCG ETF’s performance will be benchmarked against NIFTY FMCG Index - TRI (Total Return Index). The scheme will be managed by Mr Kayzad Eghlim and Mr Nishit Patel.

The NFO opens for subscription on July 20, 2021, and closes on August 02, 2021.

The face value of each unit will be Rs. 10 per unit. On allotment, value of each unit will be approximately equal to 1/100th of the value of the Underlying Index. The units being offered will be issued at a premium approximately equal to the difference between face value and allotment price.

The minimum subscription amount is Rs 1,000 and in multiples of Re 1 thereafter.

The Units of the Scheme is proposed to be listed on BSE Limited and National Stock Exchange of India Limited (NSE). Buying or selling of units of the Scheme by investors can be done on all the Trading Days of the stock exchanges. The minimum number of units that can be bought or sold is 1 (one) unit.