ICICI Prudential Nifty Midcap 150 Index Fund

ICICI Prudential Life Insurance is a financial institution that offers you a range of life insurance and investment services. The company is launching the New Fund Offering (NFO) of ICICI Pru Life Midcap Index Fund in the various plan segments. This fund is the first midcap index fund of the insurance industry. This index fund aims to track the performance of the Nifty Midcap 150 Index. You can start investing in the ICICI Pru Life Midcap Index Fund NFO through Save ‘N’ Grow Capital Guarantee Plan & EzyGrow plan. The ICICI Pru Mid Cap Index Fund NFO will start from 1 September and will end up to 25 September 2023 exclusively on Policybazaar.com.

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What is an NFO?

NFO stands for New Fund Offer. An NFO is the initial offering period during which a mutual fund or investment company offers units of a new fund to the public for the first time.In this respect, NFOs are similar to Initial Public Offerings (IPOs) of company shares in the stock market. Both are used to raise capital for a new investment vehicle.

The NFO is an opportunity for you to invest into a new fund that may have the potential to outperform before its launch.

Important Points about a New Fund Offer (NFO):

  • The insurance company sets the price of the fund units in an NFO.

  • During the NFO period, you can subscribe to the units of the new fund at the initial offer price.

  • The initial offer price is a fixed amount for each unit of the fund. This price is also referred to as the "par value" or "face value".

  • Once the NFO period is over, the price of each fund unit increases as per market fluctuations.

  • You can now buy or sell your fund units like any other stock at the prevailing Net Asset Value (NAV) price.

As we have already learnt about the term NFO, let us quickly take an overview of ICICI Prudential Life Insurance Company in the following section.

About ICICI Prudential Life Insurance

ICICI Prudential Life Insurance is one of the leading life insurance companies in India. It is a joint venture between the following two companies:

  • ICICI Bank: One of India's largest private sector banks, and 

  • Prudential Corporation Holdings Limited: An international financial services company based in the United Kingdom.

ICICI Prudential Life Insurance started its operations in 2001 and it is engaged in life insurance and asset management business. The company is well recognized for its financial strength and stability.

As on 01 September 2023, ICICI Prudential Life Insurance Company is launching an NFO of its first Index Fund, and the industry first Midcap Index Fund. Let us learn in detail about this index fund.

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What is an Index Fund?

An index fund is a type of ULIP fund/ mutual fund/ Exchange-Traded Fund (ETF) that aims to replicate the performance of a specific market index, such as NIFTY 150 or the NASDAQ 100. The goal of this fund is to replicate the returns of the chosen index by holding a portfolio of securities that mirrors the composition of that index.

For Example: If you invest in an NIFTY Midcap Index Fund, your investment will go up and down with the NIFTY 150 Index.

Benefits: The index funds have lower management fees and operating costs as compared to active funds, low-risk, and a good way to track the overall performance of the stock market.

These funds are like a way to enjoy the growth of many companies without worrying too much about which ones will do the best.

Let us quickly understand what is an ICICI Pru Life Midcap Index Fund.

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Performance of Nifty Midcap 150 vs Other Indices 

Following is the performance of Nifty MidCap 150 over the years with other indices: 

As on 31st July 2023 5 Years 10 Years 18 Years
Nifty MidCap 150 18.7% 21.5% 14.6%
NSE MidCap 100 15% 17% 14%
Nifty Small Cap 250 14% 19% 12.5%
Nifty 50 10.5% 13.4% 12.3%

[Source: nseindia.com]

Which are the Constituent Stocks of the Nifty Midcap 150 by Weightage?

The top 10 stocks as of 31 July, 2023, for the Nifty MidCap 150 Index are as follows:

Name of company Weight (%)
Shriram Finance Ltd. 2.37%
Max Healthcare Institute Ltd. 2.07%
Trent Ltd. 1.83%
AU small finance bank Ltd. 1.65%
Indian Hotels Co. Ltd. 1.64%
Tube Investment of India Ltd. 1.51%
TVS Motor co. Ltd. 1.51%
Federal Bank Ltd. 1.50%
Power Finance Corporation Ltd. 1.43%
Yes Bank Ltd 1.40%
Total 17.1%
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[Source: nseindia.com]

Sectoral Representation of Nifty Midcap 150 Index by Weightage

Here is the sectoral representation of the Nifty Midcap 150 Index as of 31 July 2023, by weightage:

Sector Weightage (%)
Financial Services 22.88%
Capital Goods  13.52%
Healthcare 11.74%
Automobile and Auto Components 9.44%
Chemicals 6.25%
Information Technology 5.66%
Consumer Services  5.25%
Consumer Durables  4.86%
Realty  3.56%
Oil, Gas & Consumable Fuels 3.30%
Power 2.75%
Services 2.26%
Construction Materials 1.77%
Metals & Mining 1.66%
Telecommunication 1.48%
Fast Moving Consumer Goods 1.39%
Media, Entertainment & Publication  1.26%
Diversified 0.53%
Textiles 0.44%
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[Source: nseindia.com]

ICICI Pru Mid Cap Index Fund 

The details of ICICI Pru Life Midcap Index Fund are mentioned below:

  • Investment Objective: To generate superior long-term returns by investing in companies that form a part of NIFTY Midcap 150 Index.

  • Pre-NFO Starts From: 01 September

  • Pre-NFO Closes On: 25 September 2023

  • Fund Type: Mid Cap Index Fund

  • Asset Allocation: 

    • Equity Assets: 90% - 100%

    • Cash / Money Market Instruments: 0 – 10%

  • Minimum Investment Amount: Rs. 3,850 per month

  • Risk Category: Very High Risk

  • Benchmark: Nifty Midcap 150 Index

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About ICICI Pru Life Midcap Index Fund NFO

The ICICI Pru Life Midcap Index Fund NFO invests is an open-ended index fund that invests in NIFTY Midcap 150 Index. The fund aims to provide you with a combination of insurance protection and investment growth. 

Features of ICICI Pru Life Midcap Index Fund NFO:

  • ICICI Pru Life Midcap Index Fund is the first midcap index fund in the insurance industry.

  • This fund invests in the top 150 midcap stocks in India that are listed on NIFTY Market Exchange. These stocks are selected based on their market capitalization.

  • The NIFTY 150 Index has given 21% annual returns in the last 10 years.

  • You can avail the fund NAV at Rs. 10, which is lower than the NAV of many other mid-cap index funds.

  • The ICICI Pru Life Midcap Index Fund have a small AUM and therefore is easier to manage. You can buy or sell the fund units at the right price easily when the fund size is small. Hence, you get higher returns in the first few years.

For Example:

  • If you had invested Rs. 1 lakh in 2013, your fund value would have become Rs. 6.7 lakhs in 2023.

  • If you had started Rs. 10,000 for 10 years in ICICI Pru Life Midcap Index Fund in June 2013, your fund value would have been Rs. 39.5 lakhs by June 2023 at 20.5% rate of return.

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What Are the Returns of Nifty Midcap 150 Index Over the Years?

As of July 31, 2023, the Nifty Midcap 150 has returned 16.97% since its inception.

Below are the returns of this index:

Investment Period Price Returns (%) Total Returns
1 year 26.31% 27.15%
5 year 16.23% 17.25%
Since Inception 15.54% 16.97%

[Source: nseindia.com]

Why You Should Invest in ICICI Pru Life Midcap Index Fund NFO?

iprunfo investmentiprunfo investment

The benefits of purchasing ICICI Pru Life Midcap Index Fund NFO are as follows:

  • Balanced Sectoral Exposure: The fund provides you the opportunity to invest in companies across a wide range of sectors and industries that hold high potential of growth.

  • Diversification: This NFO invests in a diversified portfolio of midcap stocks, which helps to reduce risk.

  • Tax Efficiency: The ICICI Pru Life Midcap Index Fund is more tax-efficient than actively managed funds, as it does not incur capital gains taxes when it rebalances its portfolios.

  • Domestic Focus: The fund invests in Indian midcap stocks, which means that it is less susceptible to the volatility of the global economy. This can be beneficial if you are concerned about the global economic outlook.

  • Exposure to High Growth Companies: This fund invests in midcap stocks that have the potential for high growth. This can help you to generate higher returns over the long term.

  • Long Term Compounding: The fund aims to achieve long-term capital appreciation. It means that you should be patient and invest for the long term in order to reap the benefits of compounding.

  • Transparency: The NIFTY Midcap 150 Index is a transparent index, which means that the constituents of the index and their weights are known to the public. This makes it easier for you to track the performance of the fund.

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Benefits of Investing in ICICI Pru Life NFO through Policybazaar

You can avail of several benefits of investing in ICICI Pru Life NFO through Policybazaar:

  • Convenience:  You can invest in the NFO online through Policybazaar without having to visit a bank or insurance agent.

  • Comparison: Policybazaar allows you to compare different plans that contain new funds before investing in them. This way you can make sure you are getting the best deal.

  • Expert Advice: Policybazaar's financial experts can help you choose the right plan of NFO for your needs and goals.

  • Tax Benefits:  You may be eligible for tax benefits on your investment in an NFO, and Policybazaar can help you understand these benefits.

  • Easy Redemption: You can redeem your investment in an NFO through Policybazaar at any time, subject to the terms and conditions of the NFO.

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How to Buy ICICI Pru Life Midcap Index Fund NFO from Policybazaar?

Follow the steps mentioned below to purchase the Save ‘N’ Grow Plan for investing in ICICI Pru Life Midcap Index Fund NFO:

Step 1: Go to the Policybazaar website or app. Log into your account or create one if you don't have an account.

Step 2: Fill in your name, city, age, and contact numbers in the given form to check the personalised benefits of the plans.

Step 3: Select the “ICICI Prudential Life Save N Grow Plan” to take advantage of the Midcap Index Fund and click on “Get Details” tab.

Step 4: Check the details of the plan carefully and click on “Proceed” by following the prompts displayed on the screen to finalize your purchase.

Step 5: Opt for the ICICI Prudential Life Save N Grow Plan to take advantage of the Midcap Fund.

Step 5: Enter the essential details, deposit the amount you want to invest and select the mode of payment.

Step 6: Provide your KYC details and complete the payment.

Step 7: Upon successful payment, you'll receive confirmation of your purchase.

Who Should Invest in ICICI Pru Life Midcap Index Fund NFO?

The ICICI Prudential NFO is a good investment option for investors who meet the following criteria:

  • Have a Long-Term Investment Horizon of At least 5 years: Midcap index funds are volatile in the short term, but it has the potential to generate higher returns over the long term. 

  • Are Looking for a Passive Investment Option with Low Costs: These index funds are a type of passive investment, which tracks the performance of the Nifty Midcap 150 Index. This makes them a good option for investors who are looking to keep their costs low.

  • Want to Track the Performance of the Nifty Midcap 150 Index: The ICICI Prudential Midcap Index Fund NFO can be a good option for investors who are looking to invest in the midcap segment without having to actively manage their portfolio.

  • Have High-Risk Appetite:These funds are riskier than large-cap funds, so investors should only invest if they can tolerate the risk of market downturns.

FAQs on ICICI Prudential Midcap Index Fund

  • What is the ICICI Prudential Mid Cap Index Fund NFO?

    The ICICI Prudential Mid Cap Index Fund NFO is a new fund offering that aims to track the performance of the NIFTY Midcap 150 Index. The fund will invest in a basket of 150 mid-cap stocks that are listed on the National Stock Exchange of India (NSE).
  • Should I consider investing in the ICICI Prudential Midcap Index Fund?

    The ICICI Prudential Midcap 150 Index Fund can be a suitable option for investors with a high risk tolerance who seek passive investment exposure to the midcap segment. This fund offers several advantages:
    • Lower Costs: Index Funds generally come with lower expenses compared to actively managed funds.

    • Tracking the Index: This fund tracks the NIFTY Midcap 150 TRI Index, exclusively investing in midcap stocks, and rebalances semi-annually to maintain its allocation.

    • Avoiding Small-Caps: Unlike some actively managed Midcap Funds, this fund ensures you won't be exposed to small-cap stocks, which can increase short-term returns but also introduce higher volatility.

  • What constitutes the NIFTY Midcap 150 Index?

    The NIFTY Midcap 150 Index consists of 150 companies listed on the National Stock Exchange (NSE). These companies are ranked between 101st and 250th based on their full market capitalization. The market capitalization method considers the total value of a company's stocks to determine its market worth.
  • What is the NAV of ICICI Prudential Life Midcap Index Fund?

    The NAV of ICICI Pru Life Midcap Index Fund is Rs. 10 as of 01 September 2023.
  • What is the return of the NIFTY Midcap Index Fund?

    As of 01 September 2023, the annualized returns of NIFTY Midcap 150 Index Fund is 21%.
  • Is the ICICI Pru Life Midcap Index Fund good?

    The ICICI Pru Life Midcap Index Fund is a good option for you to invest in the mid-cap segment of the Indian stock market. It is an index fund, which means that it tracks the performance of the NIFTY Midcap 150 Index. This index consists of the 150 mid-cap stocks with the highest market capitalization.
  • What are the investment objectives of ICICI Pru Life Midcap Index Fund?

    The investment objective of ICICI Pru Life Midcap Index Fund is to provide investors with the opportunity to participate in the growth of the midcap segment of the Indian equity market. The fund invests in a diversified portfolio of midcap stocks that are listed on the National Stock Exchange (NSE).
  • What is the risk profile of ICICI Pru Life Midcap Index Fund?

    The risk profile of ICICI Pru Life Midcap Index Fund is high to very high risk..
  • What is the minimum investment amount for ICICI Pru Life Midcap Index Fund?

    The minimum investment amount for ICICI Pru Life Midcap Index Fund is Rs. 3,850 per month. 
  • What are the benefits of investing in ICICI Pru Life Midcap Index Fund?

    The benefits of investing in ICICI Pru Life Midcap Index Fund include:
    • Diversified portfolio of midcap stocks

    • High return potential

    • Professional management by ICICI Prudential Life Insurance

*Past 5 Year annualised returns as on 01-06-2024
*All savings plans are provided by the insurer as per the IRDAI approved insurance plan. Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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