Overview
A specialised mutual fund with an emphasis on the technology industry is the ICICI Prudential Technology Fund. We’ll go over the essential information about this fund, including its performance, portfolio, and investor suitability, in this blog post.
ICICI Technology Fund Overview: Established on March 3, 2000
75% (as of February 29, 2024) is the expense ratio.
S&P BSE Teck TRI is the benchmark. 
Amount of Minimum SIP: ₹100
One-time Minimum Investment: ₹5,000
₹1,000 is the minimum investment (additional purchase).
The size of the fund is ₹12,224.12 crores, or 4.3% of the total.
Investment Strategy
The fund invests in equity and equity-related securities of technology and technology-dependent enterprises with the goal of achieving long-term capital appreciation.
It may take into account other firms in the Information Technology Services Industry, but its primary investments are in equities that are part of the Benchmark Index.
Risk Assessment
Considering the fund’s limited investing mandate, investors should exercise caution.
Based on SEBI’s Riskometer, the fund has a Very High risk rating.
It is important for investors to understand that market dynamics and industry-specific factors can make technology sector funds volatile. As of March 27, 20241, the fund had produced a return of 16.31% (NAV-Growth) over the previous three years.
But past success does not guarantee future outcomes.
Risk Ratios (derived from daily returns over the previous three years)
Variability is indicated by the standard deviation. The volatility of the ICICI Prudential Technology Fund has been high (17.44 compared to the category average of 14.72).2. Beta: Evaluates fund performance in relation to the market. The volatility of the fund is greater (0.93 vs. 0.86 for the category).2.
Risk-adjusted returns are measured by the Sharpe Ratio. The fund’s ratio is 0.78 vs. 0.89, which is less than the category average. Treynor’s Ratio: An additional metric adjusted for risk. The ratio of the ICICI Prudential Technology Fund is similar to the category average (0.15 vs.
Risk Level
Very High. Investing via the SIP is a viable option for achieving disciplined wealth building. Taxes and Capital Gains Taxation: Gains up to ₹1 lakh in a financial year are tax-exempt if units are sold after a year. Tax on gains over ₹1 lakh is 10%.The entire gain is subject to 15% tax if units are sold within a year. Taxation on Dividends: o Investors’ income is increased by dividends, which are then taxed based on their respective tax slabs.
Appropriateness and Caution
Investors ought to stay away from funds with such specific mandates.
If you decide to invest in this fund, think about going the SIP way. Long-term horizon because of sector-specific risks, avoid redemption within 7 years.
Taxation
Depending on the holding period, capital gains tax is applicable.
Dividends are subject to taxation based on individual tax slabs.
Capital Gains Tax
Gains up to ₹1 lakh in a fiscal year are not subject to tax if you sell your mutual fund units after a year from the date of investment.
Gains over ₹1 lakh are subject to 10% taxation. 15% tax is applied to the total gain if the units are sold within a year.
For as long as you own the units, there is no tax due.
Dividend Taxation
Your income is increased by the dividends you receive from the fund, and you are subject to taxation based on your individual tax bracket.
In summary of the Icici Technology Fund
Exposure to the technology industry is provided by the ICICI Prudential Technology Fund. Investors ought to evaluate their level of risk tolerance and think about making long-term investments with SIPs.
FAQ
Is this fund appropriate for short-term objectives?
If you have to redeem within seven years, stay away.
What is the ratio of expenses?
1.75% (average for the category: 2.13%)
What is its performance in comparison to the benchmark?
1-year return in comparison to S&P BSE Teck: 32.49% TRI: 28.57%
How much money must be invested?
5,0003.