ICICI Prudential Mutual Fund announced the launch of ICICI Prudential Nifty200 Value 30 ETF, an open-ended Index Exchange-Traded Fund tracking the Nifty200 Value 30 Index. The fund house has also introduced ICICI Prudential Nifty200 Value 30 Index Fund, replicating the Nifty200 Value 30 Index. Both offerings fall under the smart beta category, focusing on a factor based strategy to provide investors with a low-cost, value-driven investment approach.
The Nifty200 Value 30 Index consists of 30 stocks selected from the Nifty 200 Index, based on a 'Value Score.' This score is calculated using key valuation factors to help value-conscious investors easily identify opportunities. The index offers exposure to companies that demonstrate good potential for sustainable long-term growth. Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMCstated,"At a time when investors are seeking diversified strategies for long-term growth, value investing remains a crucial component of a well-rounded portfolio. We are excited to introduce the Nifty200 Value 30 ETF and Index Fund, offering investors a targeted approach to value-based investing, which is designed to provide growth over the long term."
The index is rebalanced semi-annually, so it could entirely align with market trends and valuation principles. Why should investors invest? - Value-based investing: The schemes are based on the concept of value investment, which aims to target undervalued stocks - Diversification: Exposes the investors to 30 companies from diverse sectors, thus diversifying their share portfolio - Transparency and low cost: Both schemes aim to provide low-cost options for investors along with low portfolio turnover
Sector Exposure: The index Nifty200 Value 30 is exposed to Financial Services, Oil, Gas & Consumable Fuels, Metals & Mining, Power, Construction Materials, Chemicals and Telecommunication and is well-poised for capturing value opportunities therein. And this exposure changes based on the value score of the companies
Performance History: The Nifty 200 Value 30 TRI outperformed the Nifty 200 TRI six times during the last ten years, indicating that value investing is a feasible strategy for an investor's portfolio under certain market conditions.
Capturing the changes in the market The index compositions are aligned to the prevailing circumstances in the market. For example, it was overweight on the financial services in 2023 and 2024 in the index composition, since the value score of the sector's stocks was higher. This flexibility ensures that the exposure to various sectors is calibrated regularly in line with the value opportunities available on a quantitative basis.
As the universe of stocks is NSE 200, the portfolio also has midcap stocks. Due to the use of value score, the exposure levels to the midcaps keep changing. For example, midcap stocks had more value in 2022, but in 2019, the exposure to midcap stocks was the least in the last five years.
