DSP Mutual Fund has recently come up with India’s first Nifty Top 10 Equal Weight Index Fund & ETF which is a first of its kind in India. This new offering distributes the investments across the 10 largest companies in the Nifty Index by free-float market capitalization.
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DSP Nifty Top 10 Equal Weight Index Fund & ETF unique selling points
The DSP Nifty Top 10 Equal Weight Index Fund & ETF is a carefully constructed product to capitalize on the higher cheap and value of the top 10 Nifty stocks compared to the Nifty 50 and Nifty 500 indices. This investment style involves several P/E ratio, ROE, and ROA aspects that have in the past demonstrated possible higher returns.
We, therefore, present these key dates which investors should expect any time the NEW FUND OFFER (NFO) is available in the market.
The New Fund Offer for DSP Nifty Top 10 Equal Weight Index Fund & DSP Nifty Top 10 Equal Weight ETF will open on 16th August 2024 and will remain open for Subscription till 30th August 2024. It is for this reason that investors are advised to make a beeline to grab this limited offer and broaden the investment opportunities under this type of fund.
Company Historical Performance and Market Analysis
The Equal Weight Index which focuses on the ten most liquid stocks has performed very well in the recent past, better than the overall market in the last 16 years. This index has been found to have delivered better returns than the two other indices – Nifty 50 and Nifty 500 – across different holding periods. Most importantly, shares of the top ten held as percent of total market capitalization are now, by all accounts, at their lowest, suggesting room for growth.
While it has lagged behind other broader indices and active funds over the last four years many indicate that when three-year historical alpha is negative the forward alpha for The Nifty Top 10 Equal Weight Index can be positive, hence may improve.
Portfolio Quality and Long-Term Growth
Nifty Top 10 Equal Weight Index could be seen to outperform the Nifty 500 Index in as much as portfolio quality is concerned, with a Return on Investment (ROI) that is 1. 5 times greater. The results for FY 2024 prove that the companies included in the Nifty 50 get up to 49% of their revenue from such firms; thus, the Nifty Top 10 Equal Weight Index represents solid performers.
The Specialists’ Conception of the Investment Process
Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund, says about this new fund, “Of course, there has been a rising demand for small and mid-cap stocks but the very large and mega-cap stocks seem to be comparatively more attractively priced.
It is generally better to invest where a relatively low value and a margin of safety are available as per the principle of value investing – a goal this new fund.
He continues, “NIFTY Top 10 Equal Weighted Index or the index that can include the ten largest companies can be a worthy addition to long term portfolios as given its promise to reduce draw-downs during bear runs while attempting to produce better absolute returns in the future.
Final Thoughts
Indian companies are among some of the most resilient businesses across the globe and for the investor who wants to leverage himself on the strong growth prospects of the top Indian firms, then DSP Nifty Top 10 Equal Weight Index Fund & ETF is the perfect ticket. As the NFO period for this fund ends on the 30th of August 2024, all those interested in investing in this unique fund must so urgently do so.
