ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Equity Income Fund, an open ended equity oriented fund that invests across equities, fixed income and arbitrage opportunities. Speaking on the launch of this fund and the thought behind it, Mr. Nimesh Shah, MD & CEO, ICICI Prudential Asset Management Company Ltd. said, "ICICI Prudential Equity Income Fund is a unique investment solution that aims to bring peace of mind to an investor. It offers a potential for stability and regular income with debt, potential for growth with equity, along with tax efficiency to help investor in achievement of financial goals."
NFO period: 18th November - 2nd December, 2014
Highlights of the NFO:
- An open ended equity fund
- Invests across equities, fixed income and arbitrage opportunities.
- Aims to generate regular income by investing significant portion in debt securities and equity arbitrage opportunities.
- Potential for capital appreciation through moderate participation in equities.
- Tax Efficient Returns: As the gross equity exposure will be greater than 65%, it will attract equity taxation*.
*Equity Taxation - Dividend income tax free; Capital gains - for more than 1 year - exempt; less than 1 year - 15%. Tax rates given are basis prevailing tax laws.
- The fund will use in-house Price to Book model to maintain the unhedged equity allocation of 20-40% of the net assets with no market cap/style bias.
- The fund will aim to exploit arbitrage opportunities by buying in the spot market and selling corresponding futures in matching positions, thereby capturing positive spread between the prices.
- The fixed income portion will be predominantly invested in corporate debentures; maturity profile of debt instruments will be based on outlook on current market conditions, interest rate outlook and the stability of ratings.
- The debt securities and equity arbitrage opportunities together form 60-80% of the net assets.