ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Nifty Oil & Gas ETF. The offering aims to provide returns that correspond to the returns provided by the Nifty Oil & Gas Index, subject to tracking errors.
The Nifty Oil & Gas Index features 15 companies from the Oil, Gas & Petroleum Industry. These companies are chosen from the Nifty 500 based on their market value that is freely available for trading. The selection ensures that no single company has more than 33 per cent weight, and the top three companies together do not exceed 62 per cent of the index. This approach ensures a well-balanced and diversified exposure to the sector.
Speaking on the launch of the product, Chintan Haria, Principal - Investment Strategy at ICICI Prudential AMC, said, "ICICI Prudential Nifty Oil & Gas ETF is designed to provide investors with access to a sector that is pivotal to the economy and is currently undervalued. The oil and gas sector is the driving force of modern economic growth, and with growing demand and consumption, it presents a significant investment opportunity. Our ETF aims to allow investors to capitalise on the resurgence in global interest in this sector."
The portfolio snapshot of the top 10 constituents by weightage showcases a diverse mix of leading companies in the oil and gas sector. Reliance Industries dominates the portfolio with a significant weightage of 34.14 per cent, followed by Oil & Natural Gas Corporation at 15.31 per cent. Indian Oil Corporation and Bharat Petroleum Corporation contribute 8.70 per cent and 8.49 per cent respectively, while GAIL (India) closely follows with 8.47 per cent.
Hindustan Petroleum Corporation holds a weightage of 4.55 per cent, and Oil India stands at 3.70 per cent. Petronet LNG, Adani Total Gas, and Indraprastha Gas round out the top 10 with weightages of 3.55 per cent, 3.53 per cent, and 2.52 per cent respectively. This data, sourced from the Nifty Oil & Gas Factsheet as of June 28, 2024, highlights the significant contributions of these key players in the industry.
Nifty Oil & Gas TRI has Outperformed the Nifty 500 TRI six times in the last 10 years. On a YTD basis (as on 20-Jun-2024) also the index has been outperforming the Nifty 500 TRI.
The Nifty Oil & Gas Index is updated twice a year to reflect the sector's performance accurately and has outperformed broader market indices broader market indices in many years, as shown in above graph, demonstrating its potential for delivering superior returns.
Why invest in ICICI Prudential Nifty Oil & Gas ETF?
- Provides exposure to companies within the oil and gas sector
- Enables diversification across different segments of the oil and gas value chain
- Historically, the Nifty Oil & Gas Index has had a strong performance with a favourable valuation compared to broader market indices
The NFO period is from 8 July to 18 July 2024. The minimum application amount during the NFO is Rs. 100 (plus in multiple of Re. 1). This ETF's benchmark is the Nifty Oil & Gas TRI, and Nishit Patel and Priya Sridhar shall manage the Scheme.
