The only thing
constant in life is change, and the evolution of human civilization is an example of that. Over the
centuries, we have discovered, learned and innovated, improving every aspect of our lives. We have used our
knowledge of science and technology to invent new products, create new processes, and improve existing ones
to create a better world.
In several sectors like Technology Services & Industrial Automation, Retail, Banks, Pharma & Healthcare Services, Telecom and internet service, Specialty / Agro Chemicals, etc., businesses are rapidly innovating to provide better products and services. Be it introducing smarter options or creating affordable options or upgrading an existing product or completely changing the way we obtain information, work, learn, communicate, shop, invest and more, innovation is at the root of every change we experience.
Several innovation platforms are likely to revolutionize the world in the next few years in diverse fields. We are already seeing the impact and the innovation is going to be more pronounced as they advance further. Artificial Intelligence, robots, switch to electric vehicles, food aggregator apps, genome editing, blockchain technology, agri-tech, co-living spaces, online homestay and experiences, shared workspaces and more are set to completely transform our lives. Innovation need not be technology-led always. It could just be a new way of looking at problems and finding unique solutions.
When these innovations take off, they can completely change every aspect of our lives. They may also create tremendous growth for these companies. These companies that are daring to think differently might create good value for their shareholders over time.
How can you as an investor hope to benefit from the growth of these innovators? How will you be able to pick the right ones to invest in at an early stage and stay invested with the aim to reap potential returns over the long term?
Here is where investing in ICICI Prudential Innovation Fund can come in handy. The objective of the scheme is to generate potential returns by investing in equity & equity related securities of companies and units of global mutual funds/ETFs that can benefit from innovation strategies and themes. The scheme may invest without any market cap bias in small, mid and large-cap companies based on the market opportunities. The scheme will not restrict itself to any particular sector/theme and will invest in companies involved in product/services/solution related innovation. This may also help you diversify your portfolio. And may help to manage your risk better while offering you scope for potential long term growth.
India has an ambitious goal of becoming a net zero-carbon economy by 2030. This will require becoming self-sufficient in renewable energy as well as switching to electric vehicles. Similarly, other industries are also switching to advanced technologies to generate efficiencies.
The switch to innovative strategies benefits the end consumer as it improves the quality of life and offers accessibility to affordable solutions. Innovations need to reach all sections of the population to improve the overall quality of life. The easy and affordable access to a smartphone and cheap internet data is a case in point. The increasing demand for innovative solutions has led to the promotion of the growth of innovation as a theme. Investing in the ICICI Prudential Innovation Fund could be a smart way invest in companies that promote innovation which have long term growth potential.
What is the investment process?
The scheme will follow a detailed investment process with the first step being identifying trends in a particular sector or theme by sector/theme analysts. These trends will be reviewed and evaluated by the fund managers along with the analysts. Post this, a broad stock universe is shortlisted based on the innovation trends. Based on this, companies will be assessed on qualitative parameters like Management execution track record, strategic partnership etc. Apart from this qualitative assessment, a quantitative assessment is also carried out basis FCF, OCF, impact on margins etc., The sectors are allocated, after considering macro factors like Govt. push, Global environment etc. Finally, based on sector & stock weightages, final portfolio is constructed.
Why should Innovation be considered an investible theme?
We saw how the pandemic triggered a wave of innovation as businesses were forced to adapt to a new lifestyle. The speed at which changes were introduced as processes to manage work, education, healthcare, consumption and every other aspect of life is a good indicator of the pace at which innovation can happen. In today’s uncertain world marred by geo-political tension and high inflation, countries are moving towards self-sufficiency, reducing dependence on others which further expands the scope for innovation.
The scheme will be managed by professional fund managers who have a good track record. So, what are you waiting for? By investing in the ICICI Prudential Innovation Fund, you can participate in the exciting growth journey of an array of companies across the theme having an innovative edge. A good way to participate in the growth that innovators may achieve is by investing in a mutual fund scheme like ICICI Prudential Innovation Fund that aims to identify these companies.
Invest in the ICICI Prudential Innovation Fund and aim to enjoy the exciting ride.