What is the Nifty Top 10 Equal Weight Index?

The Nifty Top 10 Equal Weight Index is a specialized index that selects the top 10 stocks by size from the Nifty 50 Index. The selection is based on a six-month average free-float market capitalization. This means that even if a stock is not part of the top 10 in the Nifty 50, it can be included in this index if its free-float market capitalization is at least 1.5 times that of the smallest index constituent. The index is rebalanced quarterly and reviewed semi-annually, ensuring that it remains dynamic and responsive to market changes.

Why Invest in the DSP Nifty Top 10 Equal Weight Index Fund?

The DSP Nifty Top 10 Equal Weight Index Fund offers several key benefits for investors:

1. Diversification: By focusing on the top 10 companies from the Nifty 50 Index, the fund offers a diversified portfolio that balances risk and potential return.
2. Performance Potential: Historical data suggests that the top 10 stocks from the Nifty 500 Index have underperformed in recent years. However, the law of averages implies that this trend could reverse, presenting a compelling investment opportunity.
3. Superior Returns: As of March 31, 2024, the Nifty Top 10 Equal Weight Index has demonstrated a return on equity (RoE) of 22.4% and a return on assets (RoA) of 10.4%, outperforming the Nifty 50 and Nifty 500 indices.
4. Accessibility: With a minimum investment of just ₹100 for regular purchases and ₹5,000 for the New Fund Offer (NFO), the fund is accessible to a wide range of investors.

Product Details

• Scheme Type: Open-ended index fund replicating/tracking the Nifty Top 10 Equal Weight Index
• Fund Managers: Mr. Anil Ghelani and Mr. Diipesh Shah
• Expense Ratio: Up to 1.0% for the regular plan and up to 0.25% for the direct plan
• Risk Level: High, as indicated by the scheme’s riskometer

Suitability

The DSP Nifty Top 10 Equal Weight Index Fund is suitable for investors seeking long-term capital growth by investing in equity and equity-related securities covered by the Nifty Top 10 Equal Weight Index. However, potential investors should understand that their principal will be subject to high risk and consult with their financial advisers to ensure the scheme aligns with their investment goals.

Conclusion

The DSP Nifty Top 10 Equal Weight Index Fund presents an exciting opportunity for investors to capitalize on the potential turnaround in the performance of India’s top companies. With its strategic approach and strong track record, this fund is poised to offer attractive returns for those prepared to embrace the risks and rewards of equity investing.

Please Note: “Mutual Fund Investments are Subject to Market Risk , Please Read SID Carefully before Investing”