ICICI Prudential Mutual Fund has launched a new investment scheme called the ICICI Prudential Diversified Equity All Cap Active Fund of Funds (FOF). The New Fund Offer (NFO) opened on March 2, 2026, and will remain available for subscription until March 16, 2026.
The open-ended scheme aims to invest mainly in actively managed domestic equity mutual funds across different market capitalisation segments, including large-cap, mid-cap and small-cap categories.
Diversified Fund-of-Funds Structure
The scheme follows a fund-of-funds structure, meaning it will allocate capital across a selection of active equity mutual fund schemes rather than investing directly in individual stocks.
This strategy is intended to provide investors with broad diversification across various market segments and investment styles, potentially reducing concentration risk while benefiting from multiple fund managers’ strategies.
The performance of the scheme will be measured against the Nifty 500 TRI, a widely tracked benchmark representing a large portion of the Indian equity market.
Dynamic Market-Cap Allocation
According to the asset management company, the fund will adopt a dynamic allocation approach, adjusting exposure between large-cap, mid-cap and small-cap strategies depending on prevailing market conditions.
Sankaran Naren, Executive Director and Chief Investment Officer at ICICI Prudential Asset Management Company, noted that different market segments tend to outperform at different stages of the economic cycle.
The fund’s strategy is designed to respond to these shifts through a structured allocation framework, rather than relying solely on short-term market trends.
Investment Framework
As outlined in the Scheme Information Document (SID), the fund will follow a top-down investment approach. This process involves evaluating macroeconomic indicators such as economic growth trends, inflation levels, interest rate cycles, domestic consumption patterns and global economic developments.
In addition, the fund will analyse valuation metrics including price-to-earnings (P/E) and price-to-book (P/B) ratios to assess the relative attractiveness of various market-cap segments.
Based on these insights, the portfolio allocation may be periodically adjusted to align with the scheme’s investment objectives.
The scheme will be managed by Dharmesh Kakkad and Sharmila D’silva.
Summary:
ICICI Prudential Mutual Fund has launched the ICICI Prudential Diversified Equity All Cap Active Fund of Funds, with the NFO open from March 2 to March 16, 2026. The scheme will invest in a diversified portfolio of active equity mutual funds across large-cap, mid-cap and small-cap segments. Benchmarked against the Nifty 500 TRI, the fund will use a dynamic allocation strategy based on macroeconomic trends and valuation metrics.
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