Prudential ICICI AMC Launches Prudential ICICI Equity and Derivatives Fund
Released on = February 9, 2007, 4:41 am
Press Release Author = Mitu Samar
Industry = Financial
Press Release Summary = Prudential ICICI Asset Management Company (AMC) announced the launch of the Prudential ICICI Equity and Derivatives Fund. Its open-ended scheme aims to provide better returns than typical debt instruments and lower volatility in comparison to equity.
Press Release Body = ~ An open-ended equity fund investing in cash equities, equity derivatives & debt market instruments
~ Available under two Plans based on varied risk return profiles of investors
~ New Fund Offer from November 8, 2006 - December 7, 2006
November 8, 2006: Prudential ICICI Asset Management Company (AMC) today announced the launch of the Prudential ICICI Equity and Derivatives Fund. It is an open-ended equity scheme, which aims to generate low volatility returns by investing in a judicious mix of cash equities, equity derivatives and debt markets. The fund aims to provide better returns than typical debt instruments and lower volatility in comparison to equity.
Prudential ICICI Equity & Derivatives Fund offers two plan options, which use equity derivative strategies to cater to differing risk return profiles of investors:
Income Optimizer Plan: AIMS TO ACHIEVE STABLE 'DEBT(+)' INCOME AT LOW VOLATILITY
A relatively conservative plan, which reduces the downside risks by capping the cash equity exposure of the fund at 5%. The Plan seeks to generate stable and low volatility returns by using arbitrage and other hedged derivative strategies within the equity component of the portfolio and investing the remainder of the portfolio in short term debt.
Wealth Optimiser Plan: AIMS TO ACHIEVE WEALTH CREATION AT 'EQUITY (-)' RISK. Seeks to achieve capital appreciation by predominantly investing in cash equity (65% -80%), while limiting the downside risks by hedging the portfolio based on the market conditions. The fund will also invest in other derivative strategies to generate low volatility returns. It is a relatively less conservative option and has a comparatively greater exposure to equity.
Investment Strategy
Prudential ICICI Equity and Derivatives Fund will use hedging and arbitrage derivative strategies to control the fund's volatility and reduce the downside risks. Some of the strategies like index arbitrage, alpha generation and the likes are absolutely unique to this product as against other products present in the category.
Thus, the fund aims to reconcile the desire of an investor to earn higher returns with the need to limit potential downside. Being an equity scheme it also enjoys the tax advantage, which acts as an added highlight of the product.
Speaking at the launch of its new fund, Mr. Pankaj Razdan, Managing Director, Prudential ICICI Asset Management Company Ltd said, "Striking a balance between risk and return has been an endeavour of a common Indian investor since ages. Being a customer outcome oriented organization, Prudential ICICI AMC aims to offer products that meet investors' requirements, through a perfect mélange of experience, expertise and edge."
He further added, "In view of tax advantages going away from few traditional avenues, Equity and Derivatives fund offers more than just basic risk return proposition. "
About Prudential ICICI Asset Management Company
Prudential ICICI Asset Management Company Ltd, the joint venture of ICICI Bank and Prudential Plc, enjoys the strong parentage of ICICI Bank, a well-known and trusted name in financial services in India and Prudential Plc, one of UK's largest players in the insurance and fund management sectors. Prudential ICICI Asset Management Company, in a span of just over eight years, has forged a position of pre-eminence in the Indian Mutual Fund industry as one of the largest asset management companies in the country with assets under management of Rs. 32666 crores (as of October 31, 2006). The Company manages a comprehensive range of schemes to meet the varying investment needs of its investors spread over 70 cities in the country.
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