The selection universe for this index is the Nifty 200 Index. The Quality score for each company is determined based on Return on Equity (ROE), financial leverage (Debt/Equity Ratio) and earning (EPS) growth variability analysed during the previous five years. 30 companies with higher profitability, lower leverage and more stable earnings are selected to be part of the index. The stock weight is capped at the lower of 5% or 5 times the weight of the stock in the index based on free float market capitalization, the fund house said.
Chintan Haria, Head Investment Strategy, ICICI Prudential AMC, said, “ICICI Prudential Nifty 200 Quality 30 ETF is a smart beta offering based on quality as a factor. The offering provides investors with an opportunity to diversify equity investments across various sectors and in companies having strong cash flows. The index has historically provided better dividend yield than Nifty 200 TRI and Nifty 50 TRI.”
Historically, the Nifty 200 Quality 30 index has performed better over a 10-year period in comparison to Nifty 50 TRI and Nifty 200 TRI. The CAGR returns given by Nifty 200 Quality 30 index has been to the tune of 15.2% as compared to 14.6% of Nifty 200 TRI and 14% of Nifty 50 TRI.
The NFO is currently open for subscription, and it will close on August 4.
Why invest in ICICI Prudential Nifty 200 Quality 30 ETF?• Companies are selected based on their quality score under this ETF on parameters such as return on equity (ROE), financial leverage (Debt/Equity Ratio) and earning (EPS) growth variability analysed during the previous 5 years • Opportunity to diversify equity investments across various sectors and in companies having strong cash flows
• Outperformance against broader market indices over the period of time
• Access to selected companies with a minimum investment of 1 unit on the stock exchange in term of creation unit size
