ICICI Prudential Global Advantage Fund NFO – Should you invest?

ICICI Prudential Global Advantage Fund ReviewICICI Prudential Global Advantage Fund Review


ICICI Prudential Mutual Funds came up with a new mutual fund scheme, ICICI Prudential Global Advantage Fund, which is Fund of Fund (FOF) and invests in ETFs and other investment opportunities in international stock markets. This fund would open for subscription on 16th September, 2019 and would be there till 30th September, 2019. Currently ICICI Prudential already has a global mutual fund, but it came up with another fund in similar segment. What are the details of ICICI Prudential Global Advantage Fund NFO? How are the International Mutual Funds performing now? Should you invest in ICICI Prudential Global Advantage New Fund Offer (NFO) or not?

Also Read: Best SIP Mutual Funds from Balanced Category

Overview about ICICI Prudential Global Advantage Fund NFO


This is an open-ended equity fund, which is Fund of Fund (FOF) i.e. this would invest in ETFs and other mutual fund schemes.

This scheme would open for subscription on 16th September, 2019.

This scheme would close for subscription on 30th September, 2019.

Since this is an open ended scheme, it would again open for subscription after 5 business days from the date of allotment of Mf units after the NFO period.

This scheme is available in both regular and direct plans.

This plan offers both growth option and dividend option.

This scheme is available for lump sum and SIP investment.

Minimum investment is Rs 5,000 and in multiples of Rs 1,000 there-off for lump sum investments.

Minimum investment is Rs 100 per month for monthly SIP and for a tenure of 6 months.

The NAV of the NFO is Rs 10 per unit now during initial subscription.

There is no entry load to invest in this mutual fund scheme.

There is an exit load of 1% if the mutual fund units are redeemed before 365 days.

This scheme is classified as HIGH risk scheme.

Scheme total expense ratio (TER) is estimated up to 2.25% of the total assets on any day and 0.35% additional expenses.

ICICI Prudential Global Advantage Fund NFO Prospectus details can be downloaded from here.

What is the investment objective and strategy of this ICICI Prudential Global Advantage Fund NFO?


Here are the objectives of the fund

1) ICICI Prudential Global Advantage Fund is a Fund of Funds (FoF) with the objective to generate returns by investing in units of one or more mutual fund schemes / ETFs (managed by ICICI Prudential Mutual Fund or any other Mutual Fund) that majorly invest in international markets.

2) Some amount of the Scheme will also be invested in units of domestic mutual fund schemes/ETFs managed by ICICI Prudential Mutual Fund or any other Mutual Fund.

However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved

Who can invest in this mutual fund scheme?


Any of the following can invest in this scheme.

1) The resident individual either singly or jointly

2) Minor through parent/lawful guardian

3) Companies, Bodies Corporate, Public Sector Undertakings, association of persons or bodies of individuals and societies registered under the Societies Registration Act

4) Religious and Charitable Trusts

5) Partnership Firms

6) Karta of Hindu Undivided Family (HUF)

7) Banks & Financial Institutions

8) Non-resident Indians (NRIs)

Who is the Fund Manager of ICICI Prudential Global Advantage Fund NFO?


The Fund Managers are Mr. Sankaran Naren & Mr. Dharmesh Kakkad.

What is the benchmark for this scheme?


The benchmark for this scheme is the S&P Global 1200 Index (80%)  + SP BSE 200 Index (20%).

What is the allocation pattern in this mutual fund scheme?


This fund investment pattern is as follows:

1) It invests 95% to 100% in Units of mutual fund schemes/ETFs which have the mandate to invest predominantly (at least sixty five percent of the net assets of the schemes) in equity and equity related securities in the international markets. This risk profile in this segment is between Medium to High.

2) It invests 0% to 20% in Units of equity oriented  schemes / ETFs which invests in equity and equity related securities in domestic markets. This risk profile in this segment is between Medium to High.

3) It invests 0% to 20% in Units of debt oriented/hybrid Mutual fund Schemes/ETFs.  This risk profile in this segment is low to medium.

4) It invests 0% to 5% in Money Market Instruments (with maturity not exceeding 91 days).  This risk profile in this segment is low to medium.

Can NRI invest in this MF scheme?


Yes, they can invest in this scheme. They can invest on repatriation or non repatriation basis.

Why to invest in ICICI Prudential Global Advantage Fund?


This fund invests in international markets. If you expect good growth in the global markets, it could be a good opportunity for you to invest in such funds.

Some key risk factors you should consider before you invest in such funds


One should consider some of these risk factors / negative factors before investing.

1) It invests in ETFs and Mutual Funds for more than 95% in equity and related instruments of international stock markets which is high risk.

2) The underlying mutual fund invests in companies outside India and across the globe. Any global and political factors in that country can influence the performance of the company in that country and can impact mutual fund scheme returns.

3) This fund invests up to 0% to 20% in debt and money market instruments which has turned as high risk in India post several scams in the last 1 year.

4) This scheme is fund of fund. Means the underlying mutual fund scheme would incurr expenses as well this fund to promote this fund. Means the mutual fund expenses for such fund are high and it can lower your returns

5) It would invest in ETFs or other mutual fund schemes. This fund does not have any direct stock picking strategies. 

How is the Performance of Existing International Mutual Funds?


Currently there are several international / global mutual funds, let us look at the performance. One should note that this fund invests in global markets (US and non US). Don’t get tempted with US international mutual fund schemes that are outperforming compared to others.

1) Motilal Oswal NASDAQ 100 ETF: This fund has outperformed and gave 17% annualized returns in the last 5 years and 20% annualized returns in the last 3 years and 3% returns in the last 1 year. This fund has given 21% returns since inception of 8.5 years. Motilal Oswal NASDAQ 100 ETF is good fund if you want to invest in NASDAQ listed stocks like Facebook, Google etc.,

2) Franklin India Feeder US Opps Fund: This fund gave 12% annualized returns in the last 5 years and 17% annualized returns in the last 3 years and 3% returns in the last 1 year.

3) ICICI Pru Global Stable Equity Fund: This fund gave 8% annualised returns in the last 5 years, 7% annualized returns in the last 3 years and 2% returns in the last 1 year.

4) Aditya Birla Sun Life International Equity Fund – Plan A: This fund gave 10% annualized returns in the last 10 years, 7% annualised returns in the last 5 years, 13% annualized returns in the last 3 years and 2% returns in the last 1 year.

5) Principal Global Opportunities Fund: This fund gave 6% annualized returns in the last 10 years, 4% annualised returns in the last 5 years, 9% annualized returns in the last 3 years and 10% negative returns in the last 1 year.

Should you invest in the ICICI Prudential Global Advantage Fund NFO?


ICICI Prudential Global Advantage Fund is Fund of Fund (FOF) that invests in existing ETFs and other mutual funds that invests in international markets.

Except for mutual fund schemes that invested in US stock markets, the majority of other funds that invested for opportunities across the globe are under performing.  In simple terms, mutual fund schemes that are invested in global stock markets (Other than those investing only in US stock markets) are under performing in the last 5-10 years and are providing returns which you can get it from investing in bank FDs.

I would personally like to avoid such mutual fund schemes that too when we are in the early stages of recession where the worst is yet to happen.  

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Suresh KP

ICICI Prudential Global Advantage Fund NFO Review

4 comments

  • Nisha

    Hi sheesh
    As u mentioned we r on the brink of a recession, what are some good financial strategies and tips? Mrs., gold, or take back from market

  • Aditya

    Hi,
    Love your detailed research report. A question – How is investing in this fund not a better or equal choice than investing in Motilal Oswal Nasdaq ETF?

    Thanks

    • This invests across globe whereas Motilal Oswal NASDAQ 100 ETF invests only in blue chip stocks in India. If US is growing that does not mean entire global economy is growing. You would see that in Motilal Oswal fund, but not in this fund. Thats the difference

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