ICICI Prudential Nifty50 Equal Weight Index Fund: Key points to know about this new fund offer | The Financial Express

ICICI Prudential Nifty50 Equal Weight Index Fund: Key points to know about this new fund offer

ICICI Prudential Nifty50 Equal Weight Index Fund NFO: Dates, Details and Other key points you should know about this new fund offer

ICICI Prudential Nifty50 Equal Weight Index Fund: Key points to know about this new fund offer
Check details of ICICI Prudential Nifty50 Equal Weight Index Fund. Representational image

ICICI Prudential Mutual Fund today (14 September 2022) announced the launch of the ICICI Prudential Nifty50 Equal Weight Index Fund. In a statement, ICICI Prudential MF said the scheme will invest in the constituents of the Nifty50 Equal Weight Index. The NFO opens on September 14, 2022, and closes on September 28, 2022.

“Since indices perform differently under variable market conditions, it is prudent to diversify across indices with different weightage methodology. Nifty50 Equal Weight Index is less concentrated in the top 5 sectors as compared to the Nifty 50 Index, thus providing an excellent diversification opportunity. Also, there is no size bias as the index tries to reduce the impact of bigger companies on the index performance,” Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC said.

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Key points to know about ICICI Prudential Nifty50 Equal Weight Index Fund

  • The index fund invests in the constituents of Nifty 50 Index which consists of the top 50 stocks in India based on market capitalization
  • An equal weight index has empirically higher dividend yield as compared to a market capitalization-weighted index as it allocates funds equally to its components
  • The scheme exhibits smart-beta characteristics as the index intends to have no size bias
  • It will allow non-demat account holders to seek exposure to an equal-weighted index fund
  • The index is less concentrated and helps in providing stability to the portfolio

Nifty 50 Equal Weight Index Performance

Nifty 50 Equal Weight Index has grown at 14.15% annually since the beginning of 2005. Rs 10,000 Invested in Nifty50 Equal Weight Index in 2005 would be worth Rs.1,03,683 by end of August 2022. Nifty50 Equal Weight Index has outperformed Nifty 50 Index in 5 out of last 10 Calendar Years.

Data as on 30 August 2022. Source MFIE

Nifty50 Equal Weight Index is more diversified as it is less concentrated in the top 5 sectors as compared to Nifty 50 Index. The main constituents of the index are Finance Services (23.3%), Automobile & Automotive Components (11.7%), FMCG (9.9%), Healthcare (9.3%) and IT (8.7%).

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Disclaimer: The above information is based on a press release from ICICI Prudential MF. Mutual Funds are subject to market risks. Please consult your financial advisor before making any investment in mutual funds)

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