ICICI Prudential Innovation Fund NFO – Issue Details and Review

ICICI Pru MF has launched Innovation Fund NFO which would be following innovation theme. This fund would open for subscription on 10th April, and closes on 24th April, 2023. This is unique mutual fund which does not invest in specific index or sector or segment, however follows an innovation theme. In this article, we would provide ICICI Prudential Innovation Fund NFO issue details and whether you should invest or avoid.

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ICICI Prudential Innovation Fund – NFO issue details

This is an open-ended mutual fund equity scheme. Here are the NFO issue details.

Scheme Opens 10-Apr-23
Scheme Closes 24-Apr-23
Scheme reopens for continuous purchase/sale Within 5 business days
Minimum Lumpsum Rs 5000
Minimum SIP Rs 500 for 12 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load 1% for redemption within 360 days
Risk Very High
Benchmark NIFTY 500 TRI
Fund Manager Vinayak Jayanath
Max TER 2.00%

What is the investment objective of ICICI Prudential Innovation Fund NFO?

The scheme is an open ended thematic fund. The objective of the scheme is to generate long term capital appreciation by predominantly investing in equity & equity related securities of companies and units of global mutual funds/ETFs that can benefit from innovation strategies and theme.

ICICI Prudential Innovation Fund NFO – Issue Details and Review

What is the allocation pattern in this mutual fund scheme?

Here is the allocation pattern of this scheme.

Type of instruments Min % Max % Risk Profile
Equity & Equity related securities of
companies adopting innovation
strategies and themes & Overseas
Securities adopting innovation
strategies and themes
80% 100% Very High
Other Equity & Equity related
instruments*
0% 20% Very High
Debt and Money Market Securities 0% 20% Low to Medium
Units issued by REITs and InvITs 0% 10% Very high

Why to invest in the ICICI Prudential Innovation Fund NFO?

Here are a few reasons to invest in this fund.

1) This fund invests in companies which are utilizing new technologies and process.

2) This fund also plans to invest in companies which are launching products or services which are relatively new.

Such companies can provide significant growth in short to medium term.

Why should you avoid ICICI Prudential Innovation Fund NFO?

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

1) The scheme invests majorly in equity instruments of companies engaged in or expected to benefit from innovation theme. It is possible that such innovation are short term and/or do not crystalize in a manner commensurate with expectations.

2) The scheme is thematic in nature, hence will be affected by the risks associated with the innovation theme. Owing to high concentration risk for thematic scheme, risk of capital loss is high.  There is an element of unpredictable market cycles that could run for extended periods. Loss of value due to obsolescence, or regulatory changes coupled with structural rigidity of the Scheme can lead to permanent loss of capital. Thus, investing in a thematic fund could involve potentially higher volatility and risk.

3) This scheme invests up to 20% in foreign equity, ADR/GDRs etc., where there is geo political risks and foreign exchange converison risk.,

4) It is not possible to check historical performance for such thematic mutual funds, hence we do not know whether this new MF would perform well in future or not.

5) Investors should read all risk factors before investing in such schemes.

Also Read: 5 Debt Mutual Funds with Highest SIP Returns

Should you invest in ICICI Prudential Innovation Fund NFO?

ICICI Prudential Innovation Fund follows innovation theme. Such schemes would invest in companies that use new technologies or invest in companies that launch products or services which are relatively new. Investing in such companies can provide superior gains in short to medium term.

On the other side, there is no guarantee that companies that launch new products or services would really benefit in short term. Investors cannot assess how this category of funds would perform in the medium to long term.

If you are high risk investor and excited about investing in such innovation theme based mutual fund schemes, you can invest. Otherwise, one can avoid such funds.

ICICI Prudential Innovation Fund NFO analysis is done based on SID on SEBI website

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Suresh KP

7 comments

  1. Hi Suresh, thank you kindly for your yeoman service. Had a question about this new breed of “Innovation Funds”, ICICI came up with one in April and now Nippon India. Are these fund types similar to the old “Blue chip” funds. I missed out on that opportunity long time back, so just dont want to miss one like that again. I know it is thematic and sectoral but when I checked the funds ICICI innovation fund bought most of them are the bellweathers of Indian stock market. So I dont really understand if it is any different from other funds. Is such a comparison to old “Bluechip’ funds holds true for these new breed of funds, thanks in advance

    1. Hello Harikrishnan, Thanks for your comments. Innovation funds would invest in companies based on innovation theme. There could be some overlap with bluechip companies, however it is completely different set. Bluechip are established large cap companies which can provide stable returns over medium to long term.

  2. Hi Suresh

    If not covered already pls cover the gold funds if gold bees or etf and digital equivalent to physical gold.
    Which one is best ?
    And suggest some names and how it can be bought ?

    1. Nanmith, Gold as an asset class has generated low returns in long term. If you still want to invest, you can check following

      1) Gold ETF – SBI Gold ETF or Kotak Gold ETF. Both have low expense ratio compared to others
      2) Gold funds – SBI Gold Fund or Kotak Gold Fund. Both have low expense ratio compared to others + high AUM

      1. Thanks Suresh, HDFC Gold etf has generated 10% approx over long term and if invested before 31 march we can get indexation benefits ?

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