DSP Nifty Top 10 Equal Weight Index Fund and DSP Nifty Top 10 Equal Weight ETF will aim to capitalise on the relatively better valuations of top 10 stocks compared with Nifty 50 and Nifty 500 based on metrics like P/E ratio, return on equity and return on assets ratios.
The new fund offer or NFO of DSP Nifty Top 10 Equal Weight Index Fund and DSP Nifty Top 10 Equal Weight ETF will open for subscription on August 16 and will close on August 30.
“While we have seen an increasing level of interest in small and midcap stocks, the very large and mega cap stocks appear to be trading at relatively more attractive valuations. Sound investing principles suggest that it is always better to invest where there is a relatively lower valuation and margin of safety. Hence, we are considering an index which will have the largest ten stocks, in an equal weight strategy,” said Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Mutual Fund.
He further added, “The Nifty Top 10 Equal Weight Index can be part of long-term portfolios as it provides exposure to the largest companies, which can help reduce drawdowns during downturns and can also generate better returns over the long term,” said.”
The schemes will be benchmarked against Nifty Top 10 Equal Weight TRI. The minimum investment amount is Rs 100 and any amount thereafter for DSP Nifty Top 10 Equal Weight Index Fund. The minimum investment amount for DSP Nifty Top 10 Equal Weight ETF is Rs 5,000 or any amount thereafter. The schemes will be managed by Anil Ghelani and Diipesh Shah. The expense ratio for DSP Nifty Top 10 Equal Weight Index Fund is up to 1% for regular plan and up to 0.25% for direct plan. For DSP Nifty Top 10 Equal Weight ETF, the expense ratio is up to 0.2%. The scheme will be suitable for investors who are seeking long-term capital growth and want investment in equity and equity-related securities covered by Nifty Top 10 Equal Weight Index, subject to tracking error.
