DSP Nifty Bank ETF

About DSP Nifty Private Bank ETF (PVTBANKADD)

• The DSP Nifty Private Bank ETF (exchange-traded fund) is an open-ended scheme offered by the DSP Mutual Fund house.
• It includes stocks of the op private banks listed on India’s stock exchanges.
• The ETF was launched on July 27, 2023.
• – The total assets under management (AUM) in this ETF was ₹164.03 crores as of June 30, 2024.
• The fund is managed by Anil Ghelani and Diipesh Shah, who have been overseeing it since inception.
• Investing into this ETF is as easy as trading stocks, and can be done via a demat account with a registered broker.
• It lets investors profit from intraday changes in the market, just like equity stocks.
• ETF’s holdings are transparently disclosed daily, giving investors constant visibility into the makeup of their portfolio.

Investment objective and benchmark

• The DSP Nifty Private Bank ETF aims to replicate the total return of stocks in the underlying index, subject to minor tracking errors.
• The scheme is benchmarked against the Nifty Private Bank Index. It is categorised as an ‘Exchange Traded Fund – Sectoral/Thematic Index Fund.’
• Over the previous 18 years, the market share of private banks in the banking industry has doubled, demonstrating a strong growth trend.
• In private banks, Return on Equity (ROE) and Return on Assets (ROA) have both improved significantly over the past three years, while Net Non-Performing Assets (NPAs) have dropped significantly.
• The underlying index has shown a robust performance over the last two decades.
• With infrastructural spending on the rise and a growing economy, the borrowing demand is projected to maintain a robust growth trajectory.

Asset allocation and portfolio composition

• The DSP Nifty Private Bank ETF’s asset allocation primarily targets equities and equity-related assets, with a focus on companies that are part of the underlying benchmark, the Nifty Private Bank Index.
• The ETF seeks has allocated 99.67% of the assets to securities. Cash and cash equivalents have a minimal allocation of 0.33%.
• It has allocated assets across market capitalisation – 67.22% to giant cap, 13.93% to large cap, 14.87% to mid-cap and 3.98% to small companies.
• The top 10 company holdings make up 96.87% of the asset allocation.

A breakdown of the DSP Nifty Private Bank ETF’s top holdings as of June 30, 2024:

• HDFC Bank Limited- 28.29%
• ICICI Bank Limited- 23.38%
• Kotak Mahindra Bank Limited- 10.13%
• State Bank of India- 10.09%
• Axis Bank Limited- 9.96%
• IndusInd Bank Limited- 5.51%
• Bank of Baroda- 2.91%
• The Federal Bank Limited- 2.39%
• AU Small Finance Bank Limited-2.13%
• Punjab National Bank 2.08%

The fund has delivered a 12.35% return on investment since its inception in July 2023.