Pru ICICI floats new equity fund

Prudential-ICICI Asset Management Company today launched an equity and derivatives fund. The open-ended equity scheme aims at generating low volatility returns by investing in a judicious mix of cash equities, equity derivatives and debt markets.

"The fund aims to provide better returns than typical debt instruments and lower volatility in comparison to equity," Pankaj Razdan, managing director, said.

The fund will offer two plan options; an income optimiser plan and the wealth optimiser plan. Under the income optimiser plan, the bias would be for absolute return and safety of capital, he said.

"This is a relatively conservative plan, which reduces the downside risks by capping the cash equity exposure of the fund at 5 per cent," said Nilesh Shah, chief investment officer. The AMC would limit the collection under this scheme to Rs 1,500 crore.

The wealth optimiser plan seeks to achieve capital appreciation by predominantly investing in cash equity (65 - 80 per cent) while limiting the downside risks by hedging the portfolio based on the market conditions.

The fund will also invest in other derivative strategies to generate low volatility returns.

This is a less conservative option and has a comparatively greater exposure to large cap liquid stocks," Shah said. The new fund offer, which opened today, will close on December 7.