ICICI Prudential Launches 2-Style Momentum Fund: NFO Opens July 8

ICICI Prudential Mutual Fund has announced the launch of the ICICI Prudential Active Momentum Fund, an open-ended equity scheme that follows a momentum investment theme. The New Fund Offer (NFO) opens on July 8, 2025, and will close on July 22, 2025. This fund is designed to identify and invest in stocks exhibiting sustained price and earnings momentum, adapting dynamically to evolving market conditions.

Momentum investing focuses on capitalizing on existing trends. This scheme adopts a dual momentum strategy—price momentum and earnings momentum. While price momentum is driven by technical factors such as market sentiment and investor behavior, earnings momentum is grounded in fundamental analysis, tracking earnings revisions and analyst ratings. Historically, earnings-backed momentum has been considered more sustainable, barring major disruptive events like interest rate hikes or global financial crises.

The fund provides flexibility to invest across sectors, market capitalizations (including Small-Cap, Mid-Cap, and Large-Cap segments), and styles, allowing it to tap into momentum opportunities across the broader equity universe. It also blends top-down macroeconomic trends with bottom-up stock-specific insights, increasing adaptability.

Sankaran Naren, ED & CIO of ICICI Prudential AMC, emphasized the importance of earnings trends in identifying fundamentally strong stocks. He noted that the Indian market’s diversity presents momentum opportunities in various sectors at different times. A study of top IT companies showed that consistent earnings growth often translated into sustained stock performance. Similarly, market events such as interest rate decisions have had notable impacts on price and earnings trends in sectors like NBFCs.

The scheme will be benchmarked against the Nifty 500 TRI, ensuring broad market coverage. The minimum investment is Rs 5,000, with additional investments starting from Rs 1,000. An exit load of 1 per cent will apply to redemptions within 12 months. The fund will be managed by Ms. Manasvi Shah and Ms. Sharmila D’silva, with a mandate to invest in both domestic and overseas opportunities.

Investors looking to diversify their portfolio through a combination of technical and fundamental momentum strategies may find this scheme suitable. However, as with all mutual fund schemes, investment decisions should be aligned with individual risk tolerance and financial goals.

Disclaimer: The article is for informational purposes only and not investment advice.