DSP Mutual Fund files draft for two new funds with SEBI; check key details

DSP Mutual Fund has filed draft papers for two new funds, DSP Nifty 500 Index Fund and DSP Nifty Next 50 ETF, with the Securities and Exchange Board of India (SEBI). Both are passive equity schemes that will aim to generate returns by tracking the performance of underlying benchmark indices.

DSP NIFTY 500 Index Fund

DSP Nifty 500 Index Fund is an open-ended scheme structured to replicate/track the NIFTY 500 Index with its benchmark as NIFTY 500 TRI. It’s an index fund aimed at generating returns that correspond closely to the performance of the NIFTY 500 index, subject to tracking error.

The new fund offering (NFO) period dates are yet to be announced, and will be for a minimum of 3 working days and a maximum of 5 working days.

The fund will primarily invest in securities of companies in the NIFTY 500 index. Asset allocation:

• 95-100%: Equity and equity-related securities of companies constituting the NIFTY 500 Index
• 0-5%: Cash and cash equivalents

It will be managed by Anil Ghelani, who has over 27 years of experience, including Head of Passive Investments & Products at DSP Asset Management (since 2023).

Minimum investment amount for the scheme is ₹100 during NFO and any amount thereafter. On a continuous basis, and for SIP/STP/SWP facilities too, the minimum investment is ₹100 and any amount thereafter. The maximum total expense ratio (TER) is up to 1% for the scheme, with an additional 0.3% for new inflows from specified cities.

Index funds are suitable for investors who wish to gain exposure to equities while ensuring that the portfolio composition mirrors the benchmark.

DSP NIFTY Next 50 ETF

DSP NIFTY Next 50 ETF is structured as an open-ended exchange-traded fund (ETF) to replicate the performance of the NIFTY Next 50 index. The scheme is aimed at generating returns matching the performance of the index, subject to tracking error.

The benchmark for the scheme is the NIFTY Next 50 TRI. The NFO period dates are yet to be announced, and will be for a minimum of 3 working days and a maximum of 5 working days. The fund manager for this fund is also Anil Ghelani.

The fund will primarily invest in securities of companies in the NIFTY Next 50 index, and the asset allocation is as follows:

• 95-100%: Equity and equity-related securities of companies constituting NIFTY Next 50 Index
• 0-5%: Cash and cash equivalents

The minimum application amount for the scheme during the NFO period is ₹5,000 and in multiples of ₹1 thereafter. ETF units can be bought and sold on the stock market like equity shares.