ICICI Prudential Equity Minimum Variance Fund NFO: Does it stand out?

ICICI Prudential Equity Minimum Variance Fund will be open to the public for subscription until December 2, 2024. Here, we take a detailed look at this NFO (new fund offer) and whether it can be a good addition to your portfolio. ICICI Prudential Equity Minimum Variance Fund NFO snapshot Fund name ICICI Prudential Equity Minimum Variance Fund Fund type Actively-managed equity scheme NFO period November 18, 2024 - December 2, 2024 Benchmark Nifty 50 TRI Exit load 1 per cent if withdrawn within 12 months of allotment Fund managers Vaibhav Dusad and Nitya Mishra What is the minimum variance strategy? The Minimum Variance strategy selects stocks that have the least variation in price movement. In other words, it picks low-volatile stocks, which means the strategy aims to reduce the effects of market fluctuations and build a portfolio with steadier returns. ICICI Prudential Equity Minimum Variance Fund investment strategy This fund will invest in companies part of the Nifty 50 index, which is home to the 50 largest Indian companies by market value. The selection will be based on several factors, including: Volatility: How much a stock's price moves over time. Downside risk: The potential for losses. Maximum drawdown: The largest drop in price over a given period. Upside potential: The scope for future growth. Minimum variance strategy's performance review SBI Equity Minimum Variance Fund is the only active fund that can be compared with ICICI Prudential Equity Minimum Variance Fund. While there are no passively managed funds with the same investment universe, there are similar strategies tracking two Nifty indices: Nifty 100 Low Volatility 30 TRI (three funds) and Nifty Alpha Low Volatility 30 TRI (two funds). Therefore, since the SBI Equity Minimum Variance Fund is the only comparable fund, let's look at how its performance compares to the Nifty 50 TRI across different market phases. What we found was that the SBI fund ticks most boxes . It is less volatile (look at the standard deviation row). It falls less than the Nifty 50 TRI during market pullbacks. It can also outperform during a market upswing. A stable wealth-creation tool SBI's minimum variance fund comes up trumps in most market phases Nifty 50 TRI (%) Minimum Variance Fund (%) Standard deviation  18.6