An open ended scheme
ICICI Prudential Mutual Fund has filed an offer document with
Securities and Exchange Board of India (SEBI) to launch ICICI
Prudential Oil Fund, an open ended scheme. The new fund offer (NFO)
price for the scheme is Rs.10 per unit.
The investment objective of ICICI Prudential Oil Fund is to seek to
provide investment returns by investing in foreign debt securities
which track crude oil prices and deliver returns linked to crude oil
prices.
The fund intends to offer investors an opportunity to
participate and gain from exposure to crude oil prices through an
investment in foreign debt securities having crude oil prices as the
underlying. Historically, the logistics of buying, storing and insuring
oil have constituted a barrier to entry for investors. The ownership of
the fund's units helps to overcome these barriers to entry. It also
provides an investment avenue to investors having a view on
international crude oil prices.
India is a large consumer of crude oil and it imports most of
its oil requirement, as it has very little domestic reserves. The price
of oil in India is largely regulated and subsidized and hence less
correlated to price of oil in international markets. As a result,
prices do not completely reflect the dynamics of demand and supply, as
is the case in international markets. Moreover, there is no active and
open market in India, which allows investors to take exposure to oil as
an asset class. Hence, the fund provides an efficient mechanism to its
investors to take exposure to crude oil linked assets through the
fund's investment in the international markets.
Growth and dividend options are available under the scheme.
Dividend option shall have only dividend reinvestment facility. Daily
and weekly dividend frequencies shall be available under dividend
re-investment facility.
Under normal circumstances the scheme would invest 80-100% of asset in
foreign debt securities in the countries with fully convertible
currencies. (Foreign debt securities in the countries with fully
convertible currencies, short term as well as long term debt
instruments with rating not below investment grade by
accredited/registered credit rating agencies as per Sebi circular dated
26 September 2007. The fund may invest in other securities and
instruments traded in the international markets as allowed by the
Regulations. Including securitized debt of upto 50% and stock lending
upto 50% of the portfolio). The scheme may also invest 0-20% in other
debt and money market instruments (including cash and cash equivalent).
The scheme would charge an exit load of 0.75% in respect of each
purchase/ switch-in of units, if units are redeemed/switched-out on or
before 180 days from the day of allotment. The scheme would charge no
exit load in respect of each purchase/ switch-in of units, if units are
redeemed/switched-out after 180 days from the day of allotment.
Exit Load: (a) 1% of the applicable NAV, if the amount sought to be
redeemed or switched out is invested upto 1 year (b) Nil – if the
amount sought to be redeemed or switched out is invested for a period
of more than 1 year.
The minimum application amount is Rs 5000 per application and in multiples of Re.1 thereafter.
During the NFO period of the plans under the scheme, each plan seeks to raise a minimum subscription of Rs. 1 Lakh.
The scheme will be benchmarked against the West Texas Intermediaries Crude oil prices traded on New York Mercantile Exchange.
The fund manager for the scheme: Rajat Chandak.
