DSP Mutual Fund has filed draft papers with SEBI for DSP Nifty Next 50 Index Fund. The new fund will be an open-ended scheme that attempts to replicate/track the Nifty Next 50 Index. In recent months, the Next 50 Indices of Nifty and Sensex have emerged as the focus of several schemes that have been launched or filed with SEBI recently including the UTI S&P BSE Sensex Next 50 ETF, ICICI Prudential Nifty Next 50 ETF and SBI Sensex Next 50 ETF. This new index fund from DSP MF will be open-ended hence investors can purchase/redeem scheme units on all business days.
The DSP Nifty Next 50 Index Fund will attempt to replicate the performance of the diversified Nifty Next 50 Index. To qualify as an index fund under the new SEBI definition, the scheme will invest no less than 95% of total assets in equity and equity derivatives of securities featured on the Nifty Next 50 index. The remaining 5% of assets may be invested in various debt & money market instruments including CBLO, commercial paper, certificates of deposit, treasury bills, short term bank deposits and bills rediscounting. This scheme will however not invest in securitized debt, foreign securities and credit default swaps.
Nifty Next 50 Index has been chosen as the benchmark for the DSP Nifty Next 50 Index Fund. The Nifty Next 50 features the 50 largest NSE-listed companies (by market cap) that are not included in the more well-known Nifty 50 Index. As of 28th September 2018, this index has provided returns of -0.99% and 19.48% over the 1 year and 5 year periods.
This recent correction may represent an opportunity to make investments at reasonable valuations.
The sector-wise allocations of this index include consumer goods (27%), financial services (17%), pharma (14%), automobile (11%), cement & cement products (8%) and industrial manufacturing (5%).
Gauri Sekaria will manage the DSP Nifty Next 50 Index Fund. She is already engaged in managing other passive funds of DSP MF including DSP Liquid ETF and DSP Equal Nifty 50 Fund which were launched in March 2018 and October 2017 respectively. Even though these are relatively new schemes, DSP Liquid ETF and DSP Equal Nifty 50 Fund have garnered significant attention since launch with AUM figures of Rs. 67 crores and Rs. 120 crores (as of 30th September 2018).
Date: 15 OCT 2018