ICICI Pru AMC launches ICICI Prudential Nifty50 Value 20 Index Fund, NFO closes on Jan 29. Here’s what you need to know

ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Nifty50Value 20 Index Fund. The offering aims to provide returns that closely correspond to its benchmark Nifty50 Value 20 Index returns, subject to tracking error. The New Fund Offer (NFO) opens on January 15 and closes on 29. The 20 constituents in the portfolio will be from the Nifty50 Index. 

The value stocks in the underlying index are shortlisted based on parameters like Return on Capital Employed (ROCE), Price Earnings Ratio(PE), Price to Book Value Ratio(PB) and Dividend Yield (DY). 

Stock Selection Criteria in the underlying index 

• Stocks are selected on the basis of Return on Capital Employed, Price Earnings Ratio, Price to Book Value Ratio and Dividend Yield and the final ranking is derived from selecting the value stocks from Nifty50 
• Weights of 0.4, 0.3, 0.2 and 0.1 are assigned to ranks of ROCE, PE, PB and Dividend Yield, respectively to derive the final ranking for selection 
• Ranks are assigned to all the Nifty constituents such that relatively lower price-earnings ratio and price-to-book value ratio receive a better rank, while higher dividend yield and return on capital employed receive a better rank. 
• The top 20 companies, as per the ascending order of the final ranking, are selected to form the index 

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Why invest in ICICI Prudential Nifty50 Value 20 Index Fund? 

• Exposure to Value Companies forming part of Nifty 50 Index 
• Opportunity to get factor-based exposure to Large Cap equity 
• Potential to Outperform against broader market indices over the period of time 
• Relatively Low Cost Access 

The individual constituent weight in the index is capped at 15%, and the same is reviewed and rebalanced annually in December. 

Rolling Period Returns

Chintan Haria, Principal- Investment Strategy, ICICI Prudential, said, “In elevated market conditions, value investing as a style tends to do well. Investing in ICICI Prudential Nifty 50 Value 20 Index Fund allows an investor access to value companies from the Nifty 50 universe. Over a full market cycle, the value strategy aims to deliver diversification and downside resilience and has the potential to outperform broader market indices.” 

By tracking the top 20 most value-oriented blue-chip companies, the scheme offers wealth creation opportunities for investors. Historically, the Nifty 50Value 20 Index has outperformed the Nifty 50 Index on 1-year, 3-year, and 5-year periods with lower volatility and better downside risk limitations than the Nifty 50.