With first signs of recovery in economy, the equity markets have started witnessing an improvement, according to Manish Gunwani, Senior Fund Manager, ICICI Prudential Asset Management Company. In an interaction with The Hindu , Mr. Gunwani said some companies, which were fundamentally good and hitherto shunned by investors, would attract attention as these were poised for a bounce-back at the first sign of an improving economy. Also, with an improvement in return on equity (RoE), these companies would provide an attractive investment opportunity, he said. The regulatory changes, such as deregulation in diesel prices, industry friendly regulation in telecom sector and favourable industry dynamics would lead the turnaround, he said. Keeping these factors in mind, ICICI Prudential Asset Management Company has come out with ICICI Prudential Equity Savings Fund-Series 1, Mr. Gunwani said.
This close-ended equity fund, with a minimum lock-in period of three years, aims to generate capital appreciation by investing in a well-diversified portfolio of 20-25 equity securities. The fund will be benchmarked against CNX 100 Index while it would also invest in stocks of public sector companies specified as eligible for Rajiv Gandhi Equity Savings Scheme (RGESS). The NFO (new fund offer) period is from January 20 to February 7.
As the scheme is also RGESS compliant, it is valid for tax benefit, Mr. Gunwani said. The scheme has direct plan and regular plan with growth and dividend options. The minimum application amount is Rs. 5,000.