The scheme will primarily focus on sectors that contribute to and benefit from the growth and development of rural India. Its goal is to generate long-term wealth by primarily investing in equity and equity-related instruments of companies engaged in rural and allied sectors.
“Rural India is the next theme that could have a transformational impact in the next decade. Driven by structural and cyclical economic factors and the increased focus of many state governments on rural development through various initiatives, this segment is likely to play a key role in contributing to economic growth. Our new scheme aims to leverage these developments, offering investors a chance to partake in India’s rural growth story,” said Sankaran Naren, ED and CIO of ICICI Prudential AMC.
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The scheme will be benchmarked against the Nifty Rural Index TRI, which tracks the performance of stocks from the Nifty 500 Index representing the rural theme. The largest 75 stocks from eligible basic industries are selected based on the 6-month average free-float market capitalization.The scheme will be managed by Sankaran Naren and Priyanka Khandelwal. The investment universe of the scheme will include 12 sectors such as automobile and auto components, capital goods, consumer durables, FMCG, financial services, power, construction materials, and telecommunications.The scheme will be suitable for investors seeking long-term wealth creation and looking for an equity scheme following the rural and allied theme. The principal invested in the scheme will be at “very high” risk according to the riskometer.
The fund house has chosen the rural theme as India’s growth story is intricately tied to rural development. As the country aspires to become a global manufacturing hub, rural India plays a pivotal role in this transformation, according to a press release from the fund house.
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The government has made significant strides in improving basic necessities and the quality of life in rural areas, paving the way for broader developmental efforts. With rural demand rebounding after a decade of stagnation and undergoing positive structural changes, the rural theme holds promise. Its broad scope spans multiple sectors and market caps, offering flexibility and growth potential across the economy, the release further added.
