ICICI Prudential Mutual Fund recently launched ICICI Prudential Nifty IT Index Fund, which is an open-ended Index scheme replicating the Nifty IT Index by investing in a basket of Nifty IT stocks. In a statement, ICICI Prudential AMC said the new fund aims to achieve returns of the stated index, subject to tracking error.
Commenting on the NFO, Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC said, “The growth of IT industry looks inevitable. India’s digital economy is estimated to touch USD 1 Trillion by 2025 and several disruptive technologies such as cloud computing, artificial intelligence, and blockchain are offering new windows of opportunity. Investors can tap into the long-term potential of the IT sector by investing in Nifty IT Index Fund and become a part of digital transformation.”
The NFO opened on July 28, 2022. It will close on August 11, 2022.
- Investors may benefit from the innovation & development of futuristic technology
- Investors may benefit from exposure to companies with quality management and a global presence
- The minimum application amount during the NFO is Rs. 1,000.
- The fund will be managed by Kayzad Eghlim and Nishit Patel.
The AMC said that over the years, post any crisis such as the subprime mortgage crisis, taper tantrum and covid-19 pandemic, the IT sector has rebounded stronger. The IT sector is also one of the sectors that will likely benefit from Rupee depreciation as a large part of its revenue comes from export to the US markets.
Exports by the Indian IT Industry have grown by 65% in 7 years. The IT Industry in India is expected to contribute 10% to the GDP by 2025. The Indian software industry is forecasted to cross the $100 Billion mark by 2025
Over the past decade, Nifty IT TRI has outperformed Nifty 50 TRI by delivering 18.4% CAGR as compared to 12.9% CAGR of Nifty 50.
Should you invest?
The scheme may be suitable for investors who are seeking long-term wealth creation solutions. The Index Fund will track returns by investing in a basket of Nifty IT stocks and will aim to achieve returns of the stated index, subject to tracking errors. However, investing in mutual funds is subject to market and several other risks. Therefore investors should consult their financial advisors before making any investment in mutual funds.