Highlights:
The scheme seeks to tap into the long-term growth opportunities by investing in businesses with higher ROE and ROIC, lower financial leverage, sound net cash balances, and efficient capital allocation - all while ensuring investments are made at reasonable valuations.
The scheme will adopt a flexible investment approach across market capitalizations and sectors, following a blend of top-down and bottom-up strategies.
The scheme offers investors an opportunity to power their portfolios with quality picks at a time when valuations are reasonable, aiming for long-term wealth creation.
ICICI Prudential Mutual Fund has announced the launch of the ICICI Prudential Quality Fund, an open-ended equity scheme following the Quality Factor as theme. This New Fund Offer (NFO) opens on May 6, 2025 and closes on May 20, 2025.
The scheme aims to invest in companies that exhibit stronger fundamentals such as high return on equity (ROE), robust cash flows, low financial leverage, and a history of sound capital allocation. These factors, combined with a reasonable valuation approach, can form the backbone of the scheme’s stock selection strategy.
Speaking on the scheme launch, Mr. Sankaran Naren, ED & CIO of ICICI Prudential AMC, said, “In today’s environment of economic uncertainty and moderating growth, business with sound financials and sustainable profitability stand out. ICICI Prudential Quality Fund aims to tap into this potential by selecting high quality* companies available at reasonable valuations, thereby aiming to build a resilient portfolio designed to perform across market cycles. With attractive valuations in the quality segment, we believe this is an opportune time for investors to adopt a quality-focused strategy.”
Why Invest in Quality Now?
Amid growing global economic uncertainties, including geopolitical tensions, elevated interest burdens, and a moderating domestic earnings cycle, the AMC believes that quality stocks can weather the storm. These companies generally outperform in periods of volatility due to their sound balance sheets and growth records.
While the quality theme had underperformed broader markets and other styles like momentum, value and alpha in recent years, this has resulted in more attractive entry valuations today.
*The word quality has to be understood in line with the Investment Strategy of the Scheme.