DSP Mutual Fund launches DSP Nifty Private Bank Index Fund; details here

DSP Nifty Private Bank Index Fund: Check the key details of the open-ended scheme that replicates/tracks the Nifty Private Bank Index

DSP Nifty Private Bank Index Fund: DSP Mutual Fund has announced the launch of the DSP Nifty Private Bank Index Fund, an open-ended scheme replicating/tracking the Nifty Private Bank Index. The New Fund Offer (NFO) for the DSP Nifty Private Bank Index Fund, which opens today, February 14, will remain available for subscription until February 28, 2025.

 

The investment objective of the DSP Nifty Private Bank Index Fund, according to the Scheme Information Document (SID), is to "generate returns that are commensurate with the performance of the Nifty Private Bank Index, subject to tracking error."

 

According to the SID, the corpus of the Scheme will invest in securities that are constituents of the Nifty Private Bank Index, as well as in cash and cash equivalents. Equity and equity-related securities of companies constituting the Nifty Private Bank Index, stock futures, and other permitted derivative instruments will be used only for portfolio rebalancing, along with cash and cash equivalents.

 

 

Investors can choose between lump-sum investments or systematic investment plans (SIPs) to align with their financial goals. Minimum application during the NFO: Rs 100, with any amount thereafter. On a continuous basis, the minimum application will be Rs 100, with any amount thereafter.

 

The DSP Nifty Private Bank Index Fund is benchmarked against the Nifty Private Bank TRI (Total Returns Index). The SID has outlined that the risk for the scheme, as well as for the benchmark, is very high.

 

The DSP Nifty Private Bank Index Fund will be managed by Anil Ghelani and Diipesh Shah.

 

"We believe the concentration of larger banks within the Nifty Private Bank Index can be an advantage, mirroring global trends where leading banks tend to demonstrate sustainable growth due to customer trust, access to capital, and economies of scale. This fund offers investors a streamlined approach to participate in the potential of India's private banking sector,” said Anil Ghelani, CFA, head of passive investments & products at DSP Mutual Fund.

 

"The DSP Nifty Private Bank Index Fund presents a tax-efficient way to access the private banking sector. Unlike investing directly in these stocks, owning through a mutual fund does not incur capital gains tax while rebalancing between them or on receipt of dividends. Furthermore, current valuations of several index constituents are below their historical averages, potentially offering investors an attractive entry point,” said Diipesh Shah, fund manager at DSP Mutual Fund.

 

According to the SID, no exit load shall be levied in the case of a switch of investments from the Direct Plan to the Regular Plan and vice versa.

 

The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

 

DSP Nifty Private Bank Index Fund NFO: Should you subscribe?

According to the SID, the DSP Nifty Private Bank Index Fund is suitable for investors looking for long-term capital growth, as well as investment in equity and equity-related securities covered by the Nifty Private Bank Index, subject to tracking error. "Investors should consult their financial advisers if in doubt about whether the scheme is suitable for them."