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.

Investment objective:
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.

Plans:
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.

Asset allocation:
Under normal circumstances the scheme would invest 80-100% of asset in foreign debt securities in the countries with fully convertible currencies. 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.

Load structure:
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.

Minimum application amount:
The minimum application amount is Rs 5,000 per application and in multiples of Re 1 thereafter.

Target amount:
During the NFO period of the plans under the scheme, each plan seeks to raise a minimum subscription of Rs 1 Lakh.

Benchmark Index:
The scheme will be benchmarked against the West Texas Intermediaries Crude oil prices traded on New York Mercantile Exchange.

Fund manager:
The fund manager for the scheme will be Rajat Chandak.

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