Upcoming NFO: DSP Mutual Fund Files Draft for NIFTY 10 Yr Benchmark G-Sec ETF

DSP Mutual Fund has filed the draft Scheme Information Document (SID) with SEBI for the DSP NIFTY 10 Yr Benchmark G-Sec ETF, an open-ended exchange traded fund that will track the Nifty 10 Yr Benchmark G-Sec Index.  

The scheme seeks to generate returns in line with the performance of the underlying index, before fees and expenses, while remaining subject to tracking error. The draft also notes that there is no assurance that the investment objective will be achieved.  

Portfolio Allocation and Risk Profile 

As proposed, the scheme will invest 95-100% of its assets in government securities forming part of the benchmark index. The remaining 0-5% may be held in cash and cash equivalents, including treasury bills, TREPS, and repo on government securities.  

The ETF has been classified as carrying relatively high interest rate risk and relatively low credit risk, reflecting its focus on sovereign debt securities.  

Listing and Investment Details 

The ETF is proposed to be listed on both the NSE and BSE, allowing investors to buy and sell units on the stock exchanges. During the New Fund Offer (NFO), the minimum application amount will be ₹5,000, with investments thereafter in multiples of ₹1.  

Once listed, units can be traded on the exchange in lots of one unit. The NFO opening and closing dates are yet to be announced.  

Redemption and Other Features 

The draft states that market makers and eligible large investors can transact directly with the fund in creation unit sizes. Investors can also approach the AMC directly for certain redemptions under conditions specified in SEBI regulations.  

The scheme will not offer SIP, STP, or SWP facilities and will not undertake stock lending, short selling or segregated portfolios. The first NAV is expected to be declared within five business days of allotment, with subsequent NAVs published every business day.  

Read More: NFO Alert: HDFC Mutual Fund Launches Nifty Metal ETF FoF! 

Conclusion 

The draft document details the structure of DSP's proposed government securities ETF, including its benchmark, investment allocation, listing plans and investor provisions. The fund will proceed to launch after the regulatory process is completed.  

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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.