Upcoming NFO: DSP Mutual Fund Filed Draft for BSE Top 10 Banks ETF

DSP Mutual Fund has submitted a draft Scheme Information Document for the DSP BSE Top 10 Banks ETF. The proposed scheme is an open-ended Exchange Traded Fund (ETF) that will track the BSE Top 10 Banks Index. The investment objective is to generate returns in line with the index, subject to tracking error.  

As a passive product, the fund will invest in the same stocks and weightings as the benchmark.  

Asset Allocation 

The scheme plans to invest between 95% and 100% of its assets in equity and equity-related securities of companies included in the index.  Up to 5% of the corpus may be held in cash or cash equivalents for liquidity purposes.  

Derivatives may be used in limited cases, such as portfolio rebalancing or temporary adjustments. The fund will rebalance its portfolio periodically to align with changes in the index.  

Index Composition 

The BSE Top 10 Banks Index includes the 10 largest banking stocks based on free-float market capitalisation. According to the document, HDFC Bank had a weight of 32.8% as of 31 December 2025, followed by ICICI Bank at 20.8%.  

Other constituents include Kotak Mahindra Bank, State Bank of India (SBI), Axis Bank, Federal Bank, IndusInd Bank, IDFC First Bank, AU Small Finance Bank, and Bank of Baroda.  

The index is reviewed and rebalanced twice a year, in June and December.  

Offer and Trading Details 

The ETF units will carry a face value of ₹10 and will be issued during the New Fund Offer (NFO) at a price linked to the index value. The creation unit size is set at 50,000 units, while exchange transactions can be done in lots of 1 unit. 

The NFO will remain open for a minimum of 3 working days and a maximum of 15 days. After allotment, the units are proposed to be listed on both NSE and BSE.  

Expenses and Structure 

Annual recurring expenses are estimated at up to 1.00% of daily average net assets, in line with regulatory limits for ETFs. The scheme does not currently offer multiple plans or options. As a new product, it does not have a past performance record.  

Read More: NFO Alert: ITI Mutual Fund Launches Business Cycle Fund!  

Conclusion 

The draft outlines a passive ETF focused on the 10 largest listed banking stocks. The scheme is expected to mirror the index composition and be traded on stock exchanges after launch. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.