DSP Nifty Bank ETF

About DSP Nifty Bank ETF - BANKETFADD

• The DSP NIFTY Bank ETF is an open-ended scheme that belongs to the DSP Mutual fund house.
• The scheme invests in stocks of listed banks.
• The fund was launched on December 26, 2022.
• Anil Ghelani and Diipesh Shah are the fund managers of the DSP Nifty bank ETF.
• The fund’s assets under management stood at ₹530.52 crore as of July 31, 2024.
• ETF is traded on both stock exchanges, which enables investors to trade at market price during each session.
• As DSP Nifty Bank ETF units are listed on both NSE and BSE, one can invest by buying units through a broker. All the units can be bought by retail investors directly from the demat account of their choice.

Investment Objective & Benchmark

• The scheme seeks to provide returns that correspond to the total return of the underlying index.
• It’s benchmarked against Nifty Bank Index, which comprises the most liquid and large capitalised Indian banking stocks.
• The investment strategy would revolve around reducing the tracking error to the least possible through rebalancing the portfolio. The strategy would also consider the change in weights of stocks in the index as well as the incremental collections/redemptions from the scheme.
• The ETF offers exposure to a diversified basket of stocks of India’s largest banks. This allows investors to ride on the wave of growth of India's finance sector.
• It offers exposure to the growth potential of the finance sector through a single investment instead of investing in individual stock.
• The ETF delivers diversification within the financial sector stock thus limiting the risk of investment in a single stock.
• The risk factor level of DSP Nifty Bank ETF is very high. It is suited for investors looking at a long term goal.

Asset Allocation & Portfolio Composition

• DSP Nifty Bank ETF is mandated to invest at least 80 percent of its assets in the shares of bank and financial services companies.
• Reconstitution of DSP Nifty Bank ETF happens, semi-annually in June and December.
• The asset allocation of the fund comprises around 99.67% in equities and 0.05% in cash & cash equivalent.
• The scheme predominatey invests in giant and large cap stocks, allocating over 80% of the available assets.
• Top 10 holdings in stocks of DSP Nifty Bank ETF make up over 94.75% of the asset allocation as of July 31, 2024

The top 10 company holdings in this ETF are:

• HDFC Bank Limited: 27.52%
• ICICI Bank Limited: 24%
• State Bank of India: 10.51%
• Kotak Mahindra Bank Limited: 10.3%
• Axis Bank Limited: 9.31%
• IndusInd Bank Limited: 5.44%
• The Federal Bank: 2.76%
• Bank of Baroda: 2.72%
• AU Small Fin Bank: 2.07%
• Punjab National Bank: 2.12%

DSP NIFTY Bank ETF has given a 16.01% return in the last one year against its benchmark’s 16.21 % return during the period.

Since inception, the ETF has delivered a return of 10.76%.