ICICI Prudential Mutual Fund announced the launch of the ICICI Prudential Nifty LargeMidcap 250 Index Fund that invests in constituents of the Nifty LargeMidcap 250 Index, representing in top 250 companies in market capitalisation.
The New Fund Offer (NFO) period for this fund runs from February 22, 2024, to March 7, 2024. Investors can participate in NFO with a minimum application amount of Rs. 100, with subsequent investments in multiples of Re. 1. If considering SIP options, the fund allows daily, weekly, fortnightly, and monthly SIPs starting at Rs. 100, with a minimum of 6 instalments. No exit load applies to this scheme.
ICICI Prudential Nifty LargeMidcap 250 Index Fund, which is an Index fund, passively tracks the performance of a specific index, and provide exposure to a diversified basket of stocks without the need for individual stock selection. This approach offers transparency and cost-effectiveness compared to actively managed funds.
Nifty LargeMidcap 250 Index Fund by investing in the largest 250 companies blends the stability of large-cap stocks with the growth potential of mid-cap stocks. Large-cap companies, the top 100 by market capitalization, are known for their brand names and financial stability. Mid-cap stocks ranked from 101st to 250th in market capitalisation, offer higher growth potential but with lower volatility compared to small-cap stocks.
The Nifty LargeMidcap 250 Index Fund follows a semi-annual rebalancing strategy and maintains an aggregate weightage of 50 per cent for large-cap stocks and 50 per cent for mid-cap stocks. Any reset if required is done every quarter.
The fund provides exposure to large and midcap segments of the market and the Large Midcap index has historically outperformed Large-cap indices during an economic boom, the fund house said.
Chintan Haria, Principal - Investment Strategy, ICICI Prudential AMC said, “The Nifty LargeMidcap 250 Index Fund provides an opportunity to leverage on the stability provided by large caps and the growth potential offered by midcaps at a low cost. The index offers investors a more diverse and balanced sector allocation as compared to large cap and midcap individually.”
In terms of performance, historically, the Nifty LargeMidcap 250 TRI has offered better returns, at lower risk, compared to the NIFTY 100 TRI and Nifty MidCap 150 TRI. Over the last decade, the Nifty LargeMidcap 250 TRI has generated a CAGR of 23.22 per cent. The fund house said the SIP investment in Nifty LargeMidcap 250 TRI has returned 50 per cent compared to 35 per cent returns in Nifty 100 TRI.
