A new equity or stock based mutual fund is going to enter the Indian markets. The fund belongs to ICICI Prudential Asset Management mutual fund house and is called the ICICI Prudential US Bluechip Equity Fund. As the name suggests, this fund will collect money from Indian investors and invest it in the US based companies.
In this article, we will analyze how good is this ICICI Prudential US Bluechip Equity Fund NFO, whether this ICICI Prudential US Bluechip Equity Fund offers anything new or unique for the investors and whether the investors should invest in ICICI Prudential US Bluechip Equity Fund.
ICICI Prudential US Bluechip Equity Fund NFO: Review Analysis & DetailsLet's begin with some basic details about ICICI Prudential US Bluechip Equity Fund.
What are the NFO dates for ICICI Prudential US Bluechip Equity Fund?
Image sourced as screenshot from official ICICI mutual fund site
The NFO period for ICICI Prudential US Bluechip Equity Fund is from June 18, 2012 to July 2, 2012. After the NFO period, the regular buying, selling and redemption of fund units will start at a date not yet known.
What is so unique about this ICICI Prudential US Bluechip Equity Fund?
The fund offers uniqueness in terms of allowing Indian investors to invest their money in US markets i.e. in stocks of US listed companies, through the mutual fund route. Now there are already a lot of similar funds available in Indian markets which offer investors a choice to invest money in foreign markets, here are a few of them:
- ING Latin America Equity Fund: focussed on Latin America
- HSBC Brazil Fund
and we even have an ETF or Exchange Traded fund
- Motilal Oswal Most Shares NASDAQ-100 Fund
plus there can be many more.
So this ICICI Prudential US Bluechip Equity Fund already has a direct competition from Motilal Oswal Most Shares NASDAQ-100 Fund as both are US specific.
What are the other competitor products available in comparison to ICICI Prudential US Bluechip Equity Fund?
There are many mutual funds available as listed above.
What are the risks of investing and trading ICICI Prudential US Bluechip Equity Fund?
There are always risks involved in any kind of investment.
The ICICI Mutual Fund advertisement leaflet claims that USA is a large economy, high GDP nos, strong fundamentals, and the usual blah, blah, blah which one can find in all mutual fund promotional schemes. However, an investor should also keep the risks in mind.
This fund is going to invest your money in US based listed companies - listed on NYSE and NASDAQ. Foreign Exchange or Forex risk automatically comes in. With the USD-INR forex rate showing high volatility, no one can be certain about how the returns will be after forex consideration. What if you make investment when the dollar is costly against the rupee so you invest more, but at the time of redemption the situation changes and you get less returns even if the US based investments have done well.
Then there are the risks due to global economical factors. Risks of stocks selected by the mutual fund manager not doing that good and so on.
These inherent risks are to be taken by the investor.
Final Thoughts about ICICI Prudential US Bluechip Equity Fund?
In summary - Another mutual fund focussed on US listed companies. Investors can look for this as a diversification tool at the market or country specific level provided they understand the risks listed above, especially the forex risk.
See List of All Mutual Fund and NFO Articles here
During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5000 and in multiples of Re 1 afterwards.
Tax benefit will NOT be available in ICICI Prudential US Bluechip Equity Fund.
There will be 2 plans for investors to choose from:
Multiple options available for investments:
Dividend Option - Payout & Reinvestment
ICICI Prudential US Bluechip Equity Fund Entry Load: NIL
But it comes with very high exit load at the initial stage:
ICICI Prudential US Bluechip Equity Fund Exit Load: 3% for exit (repurchase/switch-out) on or before 3 months, 1% for exit from 3 months (+1 day) to 1 year from the date of allotment.
NIL beyond 1 year.
Asset Allocation: Not much info is available except that it will be stocks of US listed companies trading on NASDAQ and NYSE. Investments might also be made in ADR and GDR of Indian and other foreign companies trading on US exchanges.
SIP or systematic investment plan? Available.
The benchmark for ICICI Prudential US Bluechip Equity Fund will be S&P 500 Index
We could not get any info about the fund manager for ICICI Prudential US Bluechip Equity Fund.