NFO Pick – (ICICI Prudential Active Momentum Fund)

15 Jul 2025 , 11:14 AM

WHAT IS ACTIVE MOMENTUM FUND AND WHY TO INVEST?

The ICICI Prudential Active Momentum Fund is an active fund that invests in equity and related instruments with momentum as the theme. The selection will be market cap agnostic and will use a mix of top-down and bottom-up approaches. The fund will consider price momentum and earnings momentum to factor in both sides of the story.

Who should invest in this active momentum fund? It is ideal for investors looking to capture long term wealth creation using momentum as the theme. Investors must be open to following a disciplined policy of sticking to strong performers and exiting underperformers. Investors must be open to dynamic strategy of switching with changing market conditions.

ASSUMPTIONS UNDERLYING ACTIVE MOMENTUM STRATEGY

Here are the key assumptions underlying this strategy.

• Existing momentum trends (price and earnings) will sustain for a longer period of time and hence it pays to invest in momentum theme.
• Based on assumption, recent winners in the stock market will continue to be winners; while the recent losers will continue to be losers in the future also.
• The strategy is to own and add securities that are showing positive shift in momentum, while selling and exiting stocks that are showing negative shift in momentum.
• A trend of good performance or bad performance, once established, will survive long enough for investors to act on the momentum theme.
• Momentum will be largely an agnostic theme and will not be circumscribed by considerations like sectors, market capitalization, company size etc.
• Uses a mix of price momentum and earnings momentum to capture 36-degree picture.

GLANCE AT THE ICICI PRUDENTIAL ACTIVE MOMENTUM FUND NFO

Here are key details of the ICICI Prudential Active Momentum Fund NFO.

• NFO opened on July 08, 2025 and closes on July 22, 2025. The objective of the fund is achieve long term capital appreciation by investing in equity and equity related instruments, following momentum as the primary theme.
• On the risk-o-meter, ICICI Prudential Active Momentum Fund is classified as “Very High Risk,” due to its predominant equity allocation and an active approach to equity selection with momentum as theme. There is equity risk, active risk, and theme risk.
• The ICICI Prudential Active Momentum Fund is best suited to investors looking to create long term wealth by riding market trends. The strategy is to constantly keep moving from underperformers to outperformers and approaches cycles dynamically.
• The Fund offers Regular and Direct plans. It also offers Growth option and IDCW option to investors. Manasvi Shah and Sharmila D’Silva (overseas investments) will be the designated fund managers. Fund performance is benchmarked to Nifty 500 TRI.
• Minimum application amount in NFO is ₹5,000 and multiples of ₹1 thereof. Subsequent additional investments will be of minimum ₹1,000. The fund structure supports SIPs, SWPs, and STPs too.
• There is an exit load of 1.0% of applicable NAV, if redeemed within 12 months from the date of allotment. Any redemption beyond 12 months does not attract exit load. However, investors are advised to take a 5-7 years approach for best results.

ICICI Prudential Active Momentum Fund is classified as an equity fund for tax purposes. Hence, LTCG will be taxed at 12.5% above ₹1,25,000 per financial year. STCG will be taxed at 20.8% (including cess). The cut off for long term will be a holding period of 1 year or more.