The Business Bytes
Mumbai, August 14, 2024 (TBB Bureau): DSP Mutual Fund has introduced India’s inaugural Nifty Top 10 Equal Weight Index Fund and ETF, set to open for subscription on August 16, 2024. This innovative fund invests equally across the top 10 companies on the Nifty by free float market capitalization.
In a market characterized by high valuations in small and mid-cap stocks, the DSP Nifty Top 10 Equal Weight Index Fund and ETF target the relative value offered by these leading companies. By focusing on firms with better valuation metrics — such as price-to-earnings ratio, return on equity, and return on assets — the fund seeks to outperform the broader Nifty 50 and Nifty 500 indices.
The Nifty Top 10 Equal Weight Index boasts a return on equity 1.5 times higher than that of the Nifty 500. As of FY 2024, the top 10 stocks contribute approximately 49 per cent of the profits of Nifty 50 companies.
Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund, noted, “Given the growing interest in small and mid-cap stocks, large and mega-cap stocks are currently trading at more attractive valuations. Investing in the Nifty Top 10 Equal Weight Index provides exposure to leading companies with lower valuations, offering a potential for reduced risk and better long-term returns.”
The New Fund Offer will close on August 30, 2024.
