ICICI Prudential Mutual Fund launches ICICI Prudential Nifty LargeMidcap 250 Index Fund

ICICI Prudential Mutual Fund, second largest mutual fund house in India by assets under management (AUM) has announced the launch of the new fund offer (NFO) of ICICI Prudential Nifty LargeMidcap 250 Index Fund (IPLM250). This is fifth scheme launched by the fund house in the last one year.

IPLM250 is a passively managed equity scheme. The scheme will track the benchmark Nifty LargeMidcap 250 Index (LMIndex). The index comprises of stocks of 100 large cap companies and 150 mid cap companies. The index allocates 50% of the weight each to large cap and mid cap companies. That makes it a true benchmark for large-mid cap space. The index is reset on quarterly basis.

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Financial services, information technology and healthcare sectors are top three sectors and have a cumulative weight of 43.7% in the index.

Chintan Haria, Principal – Investment Strategy, ICICI Prudential AMC said, “The Nifty LargeMidcap 250 Index Fund provides an excellent opportunity to leverage on the stability provided by large caps and the growth potential offered by midcaps at a low cost. The index offers investors a more diverse and balanced sector allocation as compared to large cap and midcap individually.”

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As per the scheme categorisation, Large & Mid cap schemes are expected to allocate minimum 35% each to large cap stocks and mid cap stocks. Some first-time investors prefer to invest in large & mid cap scheme, instead of investing in scheme investing in large cap and scheme investing in mid cap stocks. According to Value Research, Large & mid cap schemes, as a category have given 20.21% returns over three years ended February 22, 2024. Flexi-cap schemes over same period have given 17.10% returns.

Existing 30 Large & Mid cap schemes manage assets worth Rs 1.6 lakh crore as on January 31, 2024. New fund offer of Bajaj Finserv Large & mid cap scheme closed on February 20, 2024. PGIM Large & Mid cap Fund opened for continuous subscription on February 12, 2024.

ICICI Prudential Mutual Fund also offers actively managed ICICI Prudential Large & Mid Cap fund which manages assets worth Rs 10.854 crore and has given 25.64% returns over three years ended February 22, 2024. Zerodha and Edelweiss Mutual Funds also offer index funds tracking Nifty Large and Midcap 250 index.

IPLM250 suits investors keen to avoid fund manager risk. Since this is an index fund, investors do not require a demat account. Investors can also stagger their investments in this scheme using systematic investment plan or systematic transfer plan.

The NFO of IPLM250 will close on March 7, 2024.