ICICI Thematic Advantage FoF; A Combination of Opportunities & Growing Sectors:

We all know Equity Mutual Fund is one of the widely accepted tools to beat inflation for any long-term retail investor, either by making lumpsum or SIP investment. In the equity mutual fund hierarchy, there are: Large-Cap Funds, Mid-Caps, Large & Mid-Caps, Flexi-Caps, Multi-Caps, Small caps, and industry-specific funds called sectoral or thematic funds.

Thematic Funds basically invest money in specific themes, for example, a Pharma Fund invests in stocks related to healthcare, pharmaceuticals, and diagnostics-related stocks. Technology Fund invests in IT stocks, a Banking Sector Fund invests in banking, NBFC, and related stocks.

Today we are going to know about a fund which is a blend of different Sectoral Funds and allocation to each sector is changed dynamically based on fund managers’ views on the sectors, Fund is ICICI’s – Thematic Advantage FoF (Fund of Fund).

ICICI Thematic Advantage FoF is currently holding 10 Sectoral Funds with holdings as follows:

Performance of the Fund:

The fund’s performance over the last decade compared to Nifty 50 & S&P BSE 500 TRI, is as follows

Advantages of Investing in ICICI Thematic Advantage FoF:

1. Dynamically changing asset allocation based on Fund Manager’s view, provides increased exposure to a particular sector based on economic situations.

   For example, more asset allocation was given to ICICI PHD Fund (Pharma, Healthcare, and Diagnostics) during the Omicron wave during the first week of January 2022, and when the wave was expected to reduce; more asset allocation was given to Banking Sector.

2. As a single fund is giving exposure to 10 funds, the exposure to different sectors is increased.

3. Reduced quantity of funds in the portfolio; while maintaining exposure across growth sectors.

4. The fund’s ability to deliver consistent returns and steer through the cycles of the market as shown in the performance of the fund.

Though the AUM of this fund is very low at Rs.370.00 Crore, we recommend ICICI Thematic Advantage FoF as an option to invest for all the sectoral investors.

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