ICICI Prudential NASDAQ 100 Index Fund – Review [NFO]
ICICI Prudential Mutual Funds has launched NASDAQ 100 Index Fund which would open for subscription on 27th September 2021. This fund would invest in NASDAQ 100 Index Stocks. NASDAQ 100 Index has delivered 26% annualized returns in the last 10 years and 28% annualized returns in the last 5 years. Should you subscribe to ICICI Prudential NASDAQ 100 Index Fund NFO? What are the risk factors in such funds?
Also Read: Top Performing International Mutual Funds in last 1 year
ICICI Prudential NASDAQ 100 Index Fund – NFO Issue Details
Name of the Scheme: ICICI Prudential NASDAQ 100 Index Fund
NFO Period: This fund would open for subscription on 27th September 2021 (Monday) and closes on 11th October 2021 (Monday). Since it is an open-ended scheme, it reopens for further subscription after 5 working days from closure.
Where does the scheme invest: It is an open-ended mutual fund replicating the NASDAQ 100 Index.
Plans available: It has both ICICI Pru Nasdaq 100 Index Fund – Regular Plan and ICICI Pru Nasdaq 100 Index Fund – Direct Plan.
Further like any other fund, it provides Growth, Payout of Income Distribution cum capital withdrawal (IDCW) & Reinvestment of Income Distribution cum capital withdrawal (IDCW)
Minimum Application Amount: Rs 1,000 and in multiples of Rs 1 there-of.
Load Structure: Entry load and exit load is nil
Fund Manager: Ms. Priyanka Khandelwal
Benchmark Index: NASDAQ 100 TRI
Total Expense Ratio: 1%
Taxation of returns: Returns from this global fund would be taxed like debt funds.
Download ICICI Prudential NASDAQ 100 Index Fund SID
What is the investment objective of this MF scheme?
The objective of the scheme is to invest in companies whose securities are included in NASDAQ-100 Index and subject to tracking errors, to endeavor to achieve the returns of the above index.
There is no assurance or guarantee that the investment objective of the scheme will be realized.
What is the allocation pattern in this mutual fund?
This fund investment pattern is as follows:
|Type of instruments||Min %||Max %||Risk Profile|
|Equity and Equity related securities of companies constituting the underlying index (NASDAQ-100 Index) including Derivatives||95%||100%||High|
|Reverse Repo, Tri-party Repo Units of debt schemes/ETFs||0%||5%||Low to Medium|
What does NASDAQ 100 Index Contain?
As the name indicates, NASDAQ 100 Index contains top 100 stocks from NASDAQ based on market capitalization. Below are the top 10 stocks that are part of NASDAQ 100 Index.
Why to invest in ICICI Prudential NASDAQ 100 Index Fund?
Here are a few reasons to invest in such funds.
1) This fund would invest in NASDAQ 100 Index stocks. Investing in such stocks is a good bet for medium to long term.
2) NASDAQ 100 index delivered outstanding returns in the last 10 years. It generated 26% annualized returns in the last 10 years and 28% annualized returns in the last 5 years.
3) Investing in international index stocks would help in diversification as well as access to international markets.
4) The returns from such funds are tax efficient. These funds are classified like debt funds for taxation purpose. One can benefit from low tax rates on the returns.
Risk factors of investing in such funds
One should consider some of these risk factors / negative factors before investing.
1) Global funds might not react to the Indian financial markets. If SENSEX/NIFTY is going up due to bull run, you might not see that in international mutual funds.
2) Since this is global fund, there are currency risks and country risks.
3) It invests some portion in debt instruments where there is interest rate risk.
4) You can refer complete risk factors of investing in this scheme in SID / KIM / NFO prospectus.
Performance of existing funds in similar category
There is only one fund which is comparable i.e., Motilal Oswal NASDAQ 100 ETF (Launched in 2011) and Motilal Oswal NASDAQ 100 Fund of Fund (Launched in 2018).
Let us see the performance of Motilal Oswal NASDAQ 100 ETF which has 10 years history.
1 Year Returns – 38%
3 Years Annualized Returns – 28%
5 Years Annualized returns – 28%
10 Year Annualized returns – 26%
Also Read: JM Financial Products NCD offers up to 8.3%
Should you invest in ICICI Prudential NASDAQ 100 Index Fund?
ICICI Prudential NASDAQ 100 Index Fund invests in NASDAQ 100 index stocks. Bull run or bearish stock markets in Indian economy would not have a major impact of such funds as they do not invest in Indian equities. Investing in international or global fund is high risk. There are geo-political and currency risks. Currently, global economies are in bull run even during this covid-19 pandemic. NASDAQ 100 Index fund has delivered outstanding returns in the last 5-10 years. High risk investors can invest in such funds. Moderate to low-risk investors can avoid such funds.
Alternatively, one can invest in Motilal Oswal NASDAQ 100 FoF which has low expense ratio of 0.5% / 0.56% respectively.
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I am 18 and have invested in pgim India Flexi Cap Fund and axis small cap and now i want some diversification in foreign equity and my time horizon is for 25-30years. So which one will be perfect for me? Motilal Oswal Nasdaq 100 or Icici Prudential Nasdaq 100??
Both invest in same index i.e. NASDAQ 100. MO NASDAQ Index Fund is existing fund and you know the performance, tracking error and expense ratio. ICICI’s NASDAQ 100 Index fund is new, one need to wait to understand the tracking error and expense ratio.
Whether this fund will use direct investment in NASDAQ or through any funds of fund?
Like PGIM MF OVERSEAS INVESTMENT SCHEME
This fund invests directly in the stocks that are part of index
Can we say it looks similar to HDFC world developed FOF?
No Danesh. HDFC World Developed FoF invests in developed countries index funds i.e. USA, Europe, Japan and Rest of Asia. This fund invest only in NASDAQ 100 Index Fund (US based). Both are different.
Hi.. which will be better to invest for 2 year timeframe – icici prudential Nasdaq 100 index fund or hdfc world index NFO . Advise. Also is it advisable to start sip in mirae asset s&p 500 top 50 etf fund of fund?
None. If your time frame is just 2 years, go for simple FD or short term mutual funds. International funds for 2 years is high risk.
How this fund is comparable with mirae asset s&p 500 top etf? We invested in that and we got 173% listing nav price gains. Similar boom can we expect from this or nav remain same while listing ? Pl advice.