DSP Asset Mutual Fund announced the launch of the DSP Nifty IT ETF, an open-ended exchange-traded fund scheme replicating/tracking the Nifty IT Index.
The scheme opened for public subscription on June 21, 2023, and will close on July 03, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This is an open-ended exchange-traded fund scheme replicating/tracking the Nifty IT Index.
Q. What is the main objective of investing in this fund?
The scheme seeks to provide returns that, before expenses, correspond to the total return of the underlying index (Nifty IT TRI), subject to tracking errors. There is no assurance or guarantee that the investment objective of the scheme would be achieved.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
Minimum | Minimum | ||
Equity and Equity Related Securities of companies constituting Nifty IT Index, the Underlying Index | 95% | 100% | Very High |
Cash and Cash Equivalents | 0% | 5% | Low to Medium |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such silver exchange-traded funds (ETFs), thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
Mutual Fund House | IT ETF |
Nippon India Mutual Fund | Nippon India ETF Nifty IT |
ICICI Prudential Mutual Fund | ICICI Prudential IT ETF |
Kotak Mutual Fund | Kotak It ETF |
SBI Mutual Fund | SBI ETF IT |
Axis Mutual Fund | Axis Technology ETF |
HDFC Mutual Fund | HDFC Nifty IT ETF |
Aditya Birla Sun Life Mutual Fund | Aditya Birla Sun Life Nifty IT ETF |
| Source: Tickertape | |
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against Nifty IT TRI. The corpus of DSP Nifty IT ETF will be invested in all the stocks constituting Nifty IT TRI, in the same weightage of the Index. The Scheme would endeavour to attain returns comparable to Nifty IT TRI, subject to the tracking error. The Benchmark has been chosen on the basis of the investment pattern/objective of the scheme and the composition of the index.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” is also “Nil”.
Q. Who will manage this scheme?
Anil Ghelani and Diipesh Shah are the designated fund managers of this scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
