ICICI Prudential Flexicap Fund NFO opens for subscription on June 28

This is an open-ended dynamic equity scheme investing across large, mid and small cap stocks

Staff Writer   /   June 11, 2021

ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Flexicap Fund, an open-ended equity scheme which aims to provide capital appreciation by investing in equity and equity related securities across market capitalisation, based on an in-house market cap allocation model. The NFO period opens June 28. Let us find out more about this offering.

New fund highlights

NFO period – June 28, 2021 to July 12, 2021

Minimum application amount (including switches) during NFO – Rs 5,000/- (plus in multiple of Re. 1)

Plans – ICICI Prudential Flexicap Fund – Regular Plan & ICICI Prudential Flexicap Fund – Direct Plan

Options – Growth & IDCW

Benchmark Index S&P BSE 500 TRI

Fund manager – Rajat Chandak

Investment approach

ICICI Prudential Flexicap Fund aims to follow a mix of top-down and bottom-up approach to identify opportunities in large, mid and small cap space respectively. The investment universe considered will be the S&P BSE 500. The stock selection can be based on multiple parameters such as company fundamentals, valuations, and so on.

The fund will be guided by in-house market cap allocation model to provide direction and help ascertain the right allocation to various market caps. Further, based on macroeconomic factors and business cycle, the fund manager may fine tune the allocation suggested by the model which will be in line with the SID at all times.

How it works

The Large/Mid/Small cap allocation in ICICI Prudential Flexicap Fund will be assessed and re-balanced on a periodic basis, based on an in-house model and in line with asset allocation of the scheme.

This model comprises of parameters such as valuation, Relative Strength Index Differential, market cap weight as a percentage of total market cap to name a few. Cues from various economic indicators such as business and economic fundamentals driven by in-depth research techniques, employing strong stock selection, long term growth prospects, inflation, current account deficit/surplus, fiscal deficit etc. too can be considered while building portfolio of companies.

How it helps

The idea here is that during volatile times, large caps tend to limit downside and can provide liquidity to the portfolio. On the other hand, with expected economic recovery post the lockdown phase, mid and small caps may be better positioned to capture potential upside in the economic recovery journey.

ICICI Prudential Mutual Fund has one of India’s largest and experienced investment and research team led by S Naren, who is well known for his calls on macros and market cycles.

Flexicap category

There are two dozen flexicap funds in this category. The most prominent funds in this space are Kotak Flexicap, HDFC Flexi Cap, UTI Flexi Cap, ABSL Flexi Cap and SBI Flexicap. Over last 1 year period ended June 8, 2021, Flexicap funds on an average have gained 56 per cent, which is better than largecap funds and many thematic as well as sectoral funds. Over the 3 year period, Flexicap funds have generated 13.12 per cent CAGR, higher than international, tax-saving, and many thematic funds while over the 5 year period, Flexicap funds have clocked 14.3 per cent CAGR. Good flexicap funds act like a sturdy ship to navigate across different weather conditions.

Fund-house speak

Nimesh Shah, MD & CEO, ICICI Prudential AMC said, “Flexi cap is one category (as per SEBI Scheme categorisation) among the equity schemes which is the most flexible among the equity scheme offerings. The ICICI Prudential Flexicap Fund has the flexibility to invest across large, mid and small cap space without any restriction.”

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