ICICI Prudential Mutual Fund Files Draft for BSE Liquid Rate ETF- Growth

ICICI Prudential Mutual Fund has submitted its draft proposal for the ICICI Prudential BSE Liquid Rate ETF – Growth. This new fund aims to provide a short-term savings solution, aligning with the BSE Liquid Rate Index for relatively low credit and interest rate risks.

Investment Objective & Strategy

The ETF is designed to deliver returns that align with the BSE Liquid Rate Index, net of expenses and tracking errors. As a passively managed fund, it will closely mirror the performance of its underlying index, keeping its focus on stability and liquidity over high-risk investments.

Asset Allocation & Risk Metrics

The scheme will allocate:

• 95%-100% to the BSE Liquid Rate Index instruments.
• 0%-5% to G-Secs or T-bills with a maturity of up to 30 days.

This composition adheres to regulatory guidelines, aiming for a low-risk investment profile. Risks such as market fluctuations, tracking errors, and liquidity constraints are outlined in the draft, with mechanisms in place for rebalancing portfolios within seven days when deviations occur.

Offering Details

Units of the ETF will be available during the New Fund Offer (NFO) at ₹1,000 per unit. Post-NFO, units will be listed on both NSE and BSE, enabling daily transactions. The minimum application amount for investors is ₹1,000 during the NFO, and purchases thereafter can be made in lots of one unit.

Key Features

• No Exit Load: Investors selling units on stock exchanges will not incur exit loads.
• NAV Disclosure: The NAV will be calculated daily and disclosed on the AMC’s and AMFI’s websites by 11 PM.
• Expense Ratio: Annual expenses are capped at 1% of daily net assets, excluding GST on advisory fees.

Fund Management

The fund will be managed by Darshil Dedhia and Nikhil Kabra, professionals with a record in managing similar debt-based schemes.

Benchmark & Market Operations

The ETF will benchmark its performance against the BSE Liquid Rate Index. Investors can expect regular updates and transparency, as detailed in the Scheme Information Document.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.