ICICI Pru Strategic Metal and Energy Equity Fund – Should you invest in this NFO?
ICICI Pru is now betting on global metal and energy theme and launched Strategic Metal and Energy Fund of Fund. This NFO would open for subscription on 17th Janaury, 2022. The underlying fund has delivered 20% returns in the last 11 months. Sector funds or theme focused funds might perform well in the short term, however difficult to assess for medium to long term. Should you invest in ICICI Pru Strategic Metal and Energy Equity Fund NFO? What are the risk factors of investing in such international mutual funds?
ICICI Pru Strategic Metal and Energy Equity Fund (FoF) – NFO Details
This is an open-ended mutual fund scheme. This NFO would open for subscription on Monday, 17th January, 2022 and closes for initial subscription on Monday, 31st Janaury, 2022. Here are the NFO details.
|Scheme reopens for continuous purchase / sale||Within 5 business days|
|Minimum Lumpsum||Rs 1,000|
|Minimum SIP||Rs 100 for 6 months|
|NAV of the fund||Rs 10 during NFO period|
|Exit Load||1% within 1 year|
|Risk||Very High Risk|
|Benchmark||NYSE Arca Gold Miners Index and
the S&P Oil & Gas Exploration &
Production Select Industry Index
|Fund Manager||Ms. Priyanka Khandelwal|
What is the investment objective of ICICI Pru Strategic Metal and Energy Equity Fund?
ICICI Prudential Strategic Metal and Energy Equity Fund is an open ended fund of fund scheme that invests in the units/shares of First Trust Strategic Metal and Energy Equity UCITS Fund.
The Scheme may also invest a certain portion of its corpus in domestic debt or money market securities and/or debt mutual fund schemes/liquid schemes of domestic mutual funds, including that of ICICI Prudential Mutual Fund, in order to meet liquidity requirements from time to time.
However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
What is the allocation pattern in this mutual fund scheme?
This fund investment pattern is as follows:
|Type of instruments||Min %||Max %||Risk Profile|
|Units/shares of First Trust Strategic Metal and Energy Equity UCITS Fund||95%||100%||Medium to High|
|Debt and Money Market Securities||0%||5%||Low to Medium|
How is the performance of the underlying fund?
This FoF invests in another global fund which was launched in Feb-2021. Here is the performance of the fund
1 month returns – (3.7% negative)
3 months returns – 16.07%
6 months – 4.57%
Since inception of Feb-2021 – 20.8%
Why to invest in ICICI Pru Strategic Metal and Energy Equity Fund?
Here are a few reasons to invest in this fund.
1) ICICI Mutual Fund believes that metal and energy theme might outperform and have come up with this fund. If you want to take exposure to such themes, you can invest in this fund.
2) Though the underlying fund has short term performance history, it has outperformed and generated 20% returns in the last 11 months.
Major risk factors you should consider before investing in such funds
One should consider some of these risk factors / negative factors before investing.
1) This underlying fund would invest in focused theme of metals and energy. Funds can underperform if there is any downtrend in such focused sectors.
2) Since it invests in global fund, there are geopolitical risks and currency risks.
3) This fund invests some of the investments in debt instruments of corporates which can turn to be riskier.
ICICI Pru Strategic Metal and Energy Equity Fund – Should you invest?
ICICI Pru Strategic Metal and Energy Equity Fund is an international fund that invests in another fund, which in turn invests in metal and energy focused theme. The underlying has a short term history. Sector funds or theme focused funds might perform well in the short term to medium term, however difficult to judge for medium to long term. If you are a long term investor, stay away from such funds. High risk investors who believe that such theme might work can invest for short term.
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