DSP Mutual Fund has unveiled India’s pioneering Nifty Top 10 Equal Weight Index Fund & ETF, marking a significant milestone in the Indian investment landscape. This new offering, launching on August 16, 2024, and closing on August 30, 2024, aims to leverage the comparatively attractive valuations of the top 10 companies in the Nifty index by equally distributing investments among them.
The Nifty Top 10 Equal Weight Index has shown notable performance, outperforming broader indices such as the Nifty 50 and Nifty 500 in 9 out of the last 16 years. Despite recent underperformance relative to other indices, historical data indicates potential for a turnaround, with the index displaying positive forward alpha following negative three-year historical alpha periods.
Anil Ghelani, CFA, Head – Passive Investments & Products at DSP Mutual Fund, stated, “Amid the rising interest in small and mid-cap stocks, large-cap stocks are currently trading at more attractive valuations. Investing in the Nifty Top 10 Equal Weight Index provides a strategic advantage by focusing on high-quality companies with lower valuations, offering potential for long-term gains and reduced risks during market downturns.”