DSP Investment Managers launches fund for investment in G-Sec; NFO closes on 19 January

DSP Investment Managers has launched an index fund for investors wanting to invest in Government securities (G-Sec). On Tuesday, it announced the launch of DSP CRISIL SDL Plus G-Sec Apr 2033 50:50 Index Fund - an open-ended target maturity index fund

The New Fund Offer (NFO) opens for subscription on January 10, 2023 and will close on January 19, 2023.

DSP Investment Managers has launched an index fund for investors wanting to invest in Government securities (G-Sec). On Tuesday, it announced the launch of DSP CRISIL SDL Plus G-Sec Apr 2033 50:50 Index Fund - an open-ended target maturity index fund, the fund informed in a media release.

The New Fund Offer (NFO) opens for subscription on January 10, 2023 and will close on January 19, 2023.

The fund will invest in constituents of CRISIL SDL Plus G-Sec Apr 2033 50:50 Index with maturity on April 25, 2033, the release said. The portfolio will invest in highly liquid G-Sec and State Development Loans (SDLs) from states in a 50:50 ratio.

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“Since the fund will only invest in Government securities of centre and states maturing around 2033, it provides a good opportunity for a risk aware investor. Moreover, interest rates have increased significantly in 2022. The higher rates provide a better entry level for investors,” the release said quoting Sandeep Yadav, Head – Fixed Income, DSP Investment Managers said.

Top 5 Features:

1) The open ended structure of the fund will allow constant buying and selling of fund unlike Fixed Maturity Plans (FMPs), the release said.

2) It also offers tax efficiency via long term capital gains taxation at a lower rate of 20 per cent with 11 years Indexation benefits if invested on or before 31 March, 2023.

3) The Fund offers investors the advantage of a bond like structure with fixed maturity positioned to provide visibility of returns at maturity, the release claimed.

4) Proposed portfolio is likely to have a combination of highly liquid G-Secs and a selective list of SDLs with low leverage and high liquidity, all which are maturing within the 12-month period ending April25, 2033.

5) The portfolio will have dual filters for selecting SDLs - Liquidity Filter and Quality Filter. The Quality Filter is based on each state’s GDP in proportion to its total liabilities and the top 5 States/UTs with the best quality scores will be selected with 10 per cent weight to each state, the release claimed.

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