NFO Update: ICICI Prudential Mutual Fund launches quality fund

ICICI Prudential Mutual Fund has announced the launch of the ICICI Prudential Quality Fund, an open-ended equity scheme following the Quality Factor as theme.

The new fund offer or NFO of the scheme will open for subscription on May 6 and will close on May 20.

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The scheme will be benchmarked against Nifty 200 Quality 30 TRI and will be managed by Ihab Dalwai and Masoomi Jhurmarvala.

The exit load will be 1% if redeemed within 12 months of allotment and nil thereafter. The scheme will offer regular and direct plans both with growth and IDCW options.

The scheme aims to invest in companies that exhibit stronger fundamentals such as high return on equity (ROE), robust cash flows, low financial leverage, and a history of sound capital allocation. These factors, combined with a reasonable valuation approach, can form the backbone of the scheme’s stock selection strategy.

“In today’s environment of economic uncertainty and moderating growth, businesses with sound financials and sustainable profitability stand out. ICICI Prudential Quality Fund aims to tap into this potential by selecting high quality* companies available at reasonable valuations, thereby aiming to build a resilient portfolio designed to perform across market cycles. With attractive valuations in the quality segment, we believe this is an opportune time for investors to adopt a quality-focused strategy,” said Sankaran Naren, ED and CIO of ICICI Prudential AMC.

Amid growing global economic uncertainties, including geopolitical tensions, elevated interest burdens, and a moderating domestic earnings cycle, the AMC believes that quality stocks can weather the storm. These companies generally outperform in periods of volatility due to their sound balance sheets and growth records, according to a release by the fund house.

While the quality theme had underperformed broader markets and other styles like momentum, value and alpha in recent years, this has resulted in more attractive entry valuations today.

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The ICICI Prudential Quality Fund will follow a flexible investment strategy, drawing from both top-down (macro and sector-level) and bottom-up (company-specific) research. It will help maintain the flexibility to invest across sectors and market caps.

The fund's portfolio construction process involves narrowing down a universe of approx 625 companies to around 40–60 names, based on stringent quality and valuation filters.

The scheme is suitable for investors who are looking for long-term wealth creation and want an open ended equity fund investing in equity and equity related instruments based on the quality factor.