ICICI Prudential Mutual Fund launches of ICICI Prudential Nifty PSU Bank ETF

ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Nifty PSU Bank ETF, an open-ended exchange traded fund tracking Nifty PSU Bank Index. The ETF will reflect the performance of 12 PSU bank companies which form a part of the index.

The NFO will close for subscription on March 15, 2023.

Speaking on the launch of the product, Chintan Haria, Head – Investment Strategy, ICICI Prudential AMC, said, “Over the past decade, PSU banks have undergone a transformation on account of their improving efficiency, customer centric approach, technological superiority and improving risk management frameworks. As a result, since 2018, net NPAs have fallen by over 65% while capital adequacy ratio has risen by almost 15%. This improvement is reflected in equity market as well, with the Nifty PSU Bank TRI delivering better returns than both Nifty 50 TRI and Nifty Bank TRI over the last few years.”

In 2022, while there were broad-based gains in the banking pack, it was public sector banks that lead the rally. Investors may consider investing periodically as it enables to accumulate more units during times of market correction. This helps enhance returns when markets head higher due to lower average unit purchase cost, the press release said.

According to the fund house, these are the reasons why investor to invest in the ICICI Prudential Nifty PSU Bank ETF:

• Robust Demand – Banks intermediate by accepting deposits and lending money to those in need thereby facilitating optimum utilization of scarce resources

• Economic Growth – PSU Banks have effectively captured the GDP growth of the country due to it being a beneficiary from all sectors of the economy

• Improving Asset Quality – Asset quality is improving due to reforms which may lead to risk reduction and higher returns

• Low Capital Requirement – For a minimum investment amount of Rs.1000, an investor gets the opportunity to invest in most of the biggest banks in the country