Seasoned investors with risk appetite can opt for ICICI Prudential Business Cycles NFO

MUMBAI: High net worth investors with a strong risk appetite and lots of patience could consider the new fund offer (NFO) of ICICI Prudential Business Cycles Fund. Investment advisors said such investors could allocate as much as 5-10% of their equity portfolio to the fund. Those investors with lower tolerance for risks should stay away because of its relatively concentrated portfolio and aggressive bets that could take longer-than-expected to fructify or even backfire.

The new fund offer, which closes on January 12, will be managed by Anish Tawakley, Ihab Dalwai & Manish Banthia. Investment advisors said the selling point for ICICI Prudential Business Cycle Fund will be the presence of S Naren, who is known for his calls on macro economy and market cycles. The portfolio will have 35-45 stocks across 5-6 sectors.

“Identifying a cycle early on can help generate substantially higher returns for investors. The fund house has a strong research team with a demonstrated track record inspiring confidence that they can identify such cycles,” said Sanjiv Bajaj, Joint Chairman and MD, Bajaj Capital. He recommends sophisticated investors who understand the nuances of such calls to allocate 5-10% of their portfolio to this fund.

Financial planners believe there are events like vaccine rollout, limited rooms for fiscal stimulus and rate cuts, shift from high to low interest rates, and approval of vaccines for use against Covid 19,could lead to a change in business cycle which such a scheme could capture well.

Returns from such a fund could be unpredictable as investment ideas may not play out as anticipated by the fund manager.

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“Many a time an early entry into a cycle could also mean a longer wait for returns or underperformance compared to the benchmark, which is difficult for first time investors to understand,” said Viral Bhatt, Founder, Money Mantra. He advises first time investors to avoid thematic funds and opt for diversified equity mutual funds only.


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