ICICI Pru has launched its Equity Diversified All Cap FoF. The FoF will invest in ICICI Pru’s cap based funds – large cap, large & midcap, mid cap, small cap, flexicap and multicap.
The FoF structure allows dynamism and nimbleness in moving across cap sizes – much more than an underlying flexicap can manage.
For example, when Sharmila is most optimistic about the economy and markets, the FoF can be 100% tilted towards mid and small caps and on the flip side, when she is most cautious, the FoF can pivot 100% towards large caps.
In the present scenario, the portfolio will likely be 80-85% large caps and 15-20% small and midcaps.
Relative valuations between cap sizes (fundamentals) and relative strength indices (RSI) of the 3 cap sizes (technicals) are combined to determine weights across cap sizes in this FoF.
Beyond cap based dynamism, this product also brings manager diversity leading to style diversity. For example, the fund house’s flexicap fund follows growth style while their large cap adopts a value style.
This solution offers investors a convenient way to own only a single product which will give them participation across caps as well as styles with the ability to move nimbly across the spectrum based on dynamic market conditions.
Investors wanting to declutter their portfolio built byinvesting in multiple schemes at various points in time can look at such a solution to simplify their equity exposure, yet retain its dynamism to capture opportunities.