Investing In Bharat 22 Etf Via Icici Direct

The ICICI Prudential BHARAT 22 FOF Direct Growth fund is a mutual fund scheme that was launched on 12 October 1993. The fund seeks to generate returns by investing in units of BHARAT 22 ETF and has an investment objective to invest in constituents of the underlying index in the same proportion. The scheme's performance may differ from that of the underlying index due to tracking errors and there is no guarantee that the investment objective will be achieved. The fund has a minimum SIP investment of ₹1,000 and no lock-in period.

Investment objective

The investment objective of the Bharat 22 ETF scheme is to invest in the constituents of the underlying index in the same proportion. The scheme aims to provide returns before expenses that closely correspond to the total returns of the underlying index. However, there is no guarantee that the investment objective of the scheme will be achieved, and the performance of the scheme may differ from that of the underlying index due to tracking errors.

The scheme's portfolio is largely conservative, with most holdings in Large Cap stocks and debt instruments. As per SEBI's Riskometer, this fund has a very high risk. When investing for five years or more, you can expect gains that exceed the inflation rate and fixed-income options, but there may be fluctuations in your investment value.

This fund is mandated to invest at least 80% of its assets in large-cap stocks at all times and is passively managed, replicating the portfolio of its chosen benchmark index. The NAV of BHARAT 22 ETF was ₹75.9307 as of 20-Oct-2023, and the fund has delivered 12.64% returns since its inception almost six years ago.

The expense ratio of the BHARAT 22 ETF is 0.05, and there is no lock-in period for this fund. Capital gains taxation applies, with gains up to Rs 1 lakh in a financial year being tax-exempt, and gains over Rs 1 lakh taxed at 10%. Dividends are taxed according to the investor's tax slab, and if the dividend income exceeds Rs. 5,000 in a financial year, a TDS of 10% is deducted before distribution.

Scheme information

The ICICI Prudential BHARAT 22 FOF Direct Growth scheme was launched on 12 October 1993 and is managed by ICICI Prudential Mutual Fund. The scheme seeks to generate returns by investing in units of BHARAT 22 ETF. The investment objective of the scheme is to invest in constituents of the underlying index in the same proportion as in the underlying index and to provide returns before expenses, which closely correspond to the total returns of the underlying index. The underlying index is the S&P BSE Bharat 22 Index. The scheme's benchmark is the S&P BSE Bharat 22 Index, and the category average is BEST ETFS/INDEX. The scheme's rank within its category is not available.

The scheme has a very high risk level as per SEBI's Riskometer. The minimum SIP investment is ₹1,000, and the minimum lumpsum investment is ₹5,000. The latest NAV as of 3 December 2024 is ₹33.49, and the asset under management (AUM) as of 30 June 2023 was ₹163 Cr. The expense ratio is 0.08% as of July 1st, 2020. Returns are taxed as per the investor's Income Tax slab.

The fund's portfolio is largely conservative, with most holdings in Large Cap stocks and debt instruments. As of 30 June 2023, 99.56% was invested in Equity and 0.44% in Cash & Cash Eq. The top holdings of the fund include Larsen & Toubro Ltd., National Thermal Power Corporation Ltd., Power Grid Corporation of India Ltd., and National Aluminium Co. Ltd.

Fund performance

The ICICI Prudential Mutual Fund's BHARAT 22 ETF scheme aims to invest in the constituents of the underlying index in the same proportion and provide returns that closely correspond to the total returns of the underlying index. However, the scheme's performance may differ from that of the underlying index due to tracking errors, and there is no guarantee that the investment objective will be achieved.

As of November 19, 2024, the latest Net Asset Value (NAV) of the BHARAT 22 ETF was ₹109.2479, with a change of 0.04% from the previous day. The fund size is ₹19159.83 Cr, which is 1.81% of the investment in the category. The expense ratio is 0.07%, lower than the category average of 0.51%.

The fund has 99.93% investment in domestic equities, with 82.19% in Large Cap stocks, 10.39% in Mid Cap stocks, and 7.33% in Small Cap stocks. The portfolio turnover ratio is 14.00%, and the fund manager updated the portfolio less frequently than peers in the last year.

The top 10 stocks in the portfolio as of October 31, 2024, are:

• Larsen & Toubro Ltd.
• National Thermal Power Corporation Ltd.
• Power Grid Corporation of India Ltd.
• State Bank of India
• National Aluminium Co. Ltd.
• Bharat Electronics Ltd.
• Oil & Natural Gas Corporation Ltd.

Ratios calculated on daily returns for the last three years (as of October 31, 2024) show that the fund has a standard deviation value, indicating the volatility of fund returns. The beta value suggests that the fund's performance is more predictable compared to similar funds in the market. The Sharpe ratio indicates that the fund has been able to generate better returns for the amount of risk taken. The Treynor's ratio shows that the fund has achieved higher returns for each unit of risk taken. However, the alpha indicates that the fund has generated poor risk-adjusted returns compared to a benchmark.

Risk analysis

Market Risk

Market risk, also known as systematic risk, is the possibility of an investor experiencing losses due to factors that impact the overall performance of the financial markets. This type of risk is inherent in all investments and cannot be completely eliminated. However, it can be managed through diversification and investing in a variety of asset classes. The Bharat 22 ETF, offered by ICICI Prudential Mutual Fund, aims to invest in a diverse range of sectors, including large-cap, mid-cap, and small-cap stocks, to potentially reduce this risk.

Tracking Error Risk

The investment objective of the Bharat 22 ETF is to replicate the performance of the underlying index, the S&P BSE Bharat 22 Index. However, it is important to note that the scheme's performance may differ from that of the underlying index due to tracking errors. Tracking errors can occur due to various factors such as transaction costs, fund management style, and changes in the underlying index composition. While the fund managers aim to minimize these errors, there is no assurance or guarantee that the investment objective of replicating the index performance will be achieved.

Volatility Risk

Volatility risk refers to the potential for fluctuations in the value of an investment, which can lead to uncertainty and potential losses. The standard deviation, beta, and Sharpe ratio are commonly used metrics to assess the volatility of a fund. A lower standard deviation indicates more predictable performance, while a lower beta implies more predictable performance compared to similar funds. The Sharpe ratio measures the risk-adjusted return, with a higher value indicating better performance for the level of risk taken. While historical volatility does not guarantee future performance, it can provide investors with an idea of the fund's past stability.

Investment Objective Risk

The Bharat 22 ETF has an investment objective to invest in the constituents of the underlying index in the same proportion. However, it is important to note that there is no assurance or guarantee that this investment objective will be achieved. The actual performance of the scheme may differ from expectations due to various factors, including market conditions, fund management decisions, and economic events. Investors should carefully consider their risk tolerance and financial goals before investing.

Expense Ratio Risk

The expense ratio of a mutual fund represents the annual fees charged by the fund house for managing the investor's money. A higher expense ratio can impact the overall returns of the investment. The Bharat 22 ETF has an expense ratio of 0.07%, which is slightly lower than the category average of 0.51%. While a lower expense ratio generally leads to higher returns, investors should also consider other factors such as fund performance, investment objectives, and risk profile when making investment decisions.

Investment options

ICICI Prudential Mutual Fund offers a range of investment options, including the ICICI Prudential BHARAT 22 FOF Direct Growth fund. This fund seeks to generate returns by investing in units of BHARAT 22 ETF, with the objective of closely corresponding to the total returns of the underlying index. The scheme is mandated to invest at least 80% of its assets in large-cap stocks, making it a conservative investment strategy.

The minimum SIP investment for this fund is ₹1,000, and there is no lock-in period. The expense ratio is 0.08% as of August 2023, and the fund size is ₹163 Cr as of June 2023.

ICICI Direct also offers other investment options, such as:

• One Click Mutual Fund
• Retirement Solutions
• IPO through UPI
• Group Health Insurance
• ICICI Home Finance FD
• Sovereign Gold Bonds
• Real Estate Investment Trust (REIT)
• Floating Rate Savings Bond
• Government Securities
• Exchange Traded Bonds
• Top Performing NPS Schemes

Where to Invest

Mutual funds can be bought directly from the website of the fund house, such as the ICICI Prudential Mutual Fund website. They can also be purchased through platforms like MF Central and MF Utility. Alternatively, investors can seek help from a mutual fund distributor, including most banks.

Frequently asked questions