DSP Asset Mutual Fund announced the launch of the DSP Nifty Private Bank ETF, an open-ended scheme replicating/tracking the Nifty Private Bank Index.
The scheme opened for public subscription on July 17, 2023, and will close on July 21, 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 Private Bank 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 Private Bank TRI, subject to tracking errors. There is no assurance that the investment objective of the scheme will 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:
| Types of Instruments | Indicative Allocations (% of total assets) | Risk Profile | |
Minimum | Maximum | ||
Equity and equity-related securities of companies constituting the Nifty Private Bank Index, the underlying index | 95% | 100% | Very High Risk |
Cash and cash equivalents | 0% | 5% | Low Risk |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such Nifty bank 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 | Nifty Bank ETF |
Nippon India Mutual Fund | Nippon India ETF Bank BeES |
ICICI Prudential Mutual Fund | ICICI Prudential Nifty Bank ETF |
Kotak Mahindra Mutual Fund | KotakBETF |
SBI Mutual Fund | SBI-ETF Nifty Bank |
Axis Mutual Fund | Axis Banking ETF |
HDFC Mutual Fund | HDFC Banking ETF |
Aditya Birla Sun Life Mutual Fund | Aditya BSL Banking ETF |
UTI Mutual Fund | UTI Bank ETF |
DSP Mutual Fund | DSP Nifty Bank ETF |
Edelweiss Mutual Fund | Edelweiss ETF-Nifty Bank |
| Source: Tickertape | |
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against Nifty Private Bank TRI. The NIFTY Private Bank Index is designed to reflect the performance of the banks from the private sector. The index comprises 10 stocks and the weights of each company in the index were capped at 25% (until March 29, 2019).
The corpus of DSP Nifty Private Bank ETF will be invested in all the stocks constituting Nifty Private Bank TRI, in the same weightage as the index. The scheme would endeavour to attain returns comparable to Nifty Private Bank 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” would also be “Nil”.
Q. Who will manage this scheme?
Anil Ghelani andDiipesh 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.
