DSP Mutual Fund has launched the Nifty Private Bank Index Fund. This is the open-ended scheme, which will track the Nifty Private Bank Index. This gives fund investors a chance to take advantage of the growth of private banking sector. This New Fund Offer (NFO) has opened for investment on 14 February. It will close on 28 February.
You can also invest through SIP
Investors can invest in this NFO through lump sum or SIP. This fund will invest in shares of the largest four private banks. The weightage of these banks in the Nifty Bank Index is around 80 percent. These banks have a trust of customers. They do not have difficulty in raising capital. These are large -sized banks, which do not have difficulty in gaining growth. Private banks have contributed to India’s banking sector growth in the last two decades.
Good opportunity to invest in banking sector
The performance of the Nifty Private Bank Index has been going on poorly for some time. Its current valuation is less than an average valuation of 10 years. Further, improvement of these banks is expected to bring improvement. This is a good time to invest in banking stocks. Investors who want to invest in stocks of private banks. They can invest in this new fund offer. Before this, they should consult their financial advisor.
Customers trust on big banks
DSP Mutual Fund Head (Passive Investments and Products) and CFA Anil Ghalani said that consultation of large banks in the Nifty Private Bank Index can be beneficial for investors. The performance of large banks is generally good, as they are confident of customers. This fund gives an opportunity to take advantage of the growth of private banking sector in India.
Should you invest?
DSP Mutual Fund fund manager Deepesh Shah said that DSP Nifty Private Bank Index Fund gives a chance to take advantage of this sector in a tax-efficient manner. Unlike investing directly in shares, a capital gains tax does not have to be paid on ribbalancing or dividends in mutual funds. Since many stocks of the Nifty Private Bank Index are available at a lower than their historic average, which is the right opportunity to invest in them.
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Experts say that it is better to invest in already available funds in the market than investing in NFOs. There are already many funds in the market, whose focus is on the banking sector. The track records of these funds can be seen. However, this fund will only invest in shares of big private banks, so there is not much risk in investing in it.