DSP Asset Managers announced the launch of DSP Nifty SDL Plus G - Sec

Mumbai, March 11, 2022: DSP Asset Managers announced the launch of DSP Nifty SDL Plus G - Sec Jun 2028 30:70 Index Fund, an open-ended target maturity index fund, which will mature after about six years in June 2028. The portfolio will be invested only in sovereign securities with a 70:30 split between Government Securities (G-Sec) and State Development Loans (SDL) respectively, in line with the Nifty SDL Plus G - Sec Jun 2028 30:70 Index.

The portfolio has a unique design with dual filters for selecting SDLs. Instead of just applying a Liquidity Filter, there is an additional Quality Filter of low leverage. This Quality Filter is based on each State’s GDP in proportion to its total liabilities and the top 10 States/UTs with the best quality scores will be selected. Hence the portfolio will have a combination of highly liquid G-Secs and a selective list of SDLs with low leverage and high liquidity, all which are maturing during the 12-month period ending June 30, 2028.

The Fund offers investors the potential of relatively stable and predictable returns. Long term investors (holding>3 years) can also get additional year of indexation benefit if invested before 31 Mar 2022. Investors who subscribe during the NFO and remain invested till the defined maturity can get a total of 7 years Indexation benefit.

The New Fund Offer opens for subscription on March 11th, 2022 and closes on March 17th 2022.

“DSP Nifty SDL Plus G - Sec Jun 2028 30:70 Index Fund has a unique Quality Filter which shortlists the top 10 States based on their fiscal (financial) condition, having the lowest Debt/GDP. In post-pandemic years, where the fiscal positions of states will become more discriminatory it is prudent to differentiate between the states before investing,” says Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Asset Managers.

“Seventy percent of the investment in the fund is in G-Secs. The spreads between G-Sec and SDL is amongst the lowest ever. At such low spreads, it makes sense to have more investment in G-Secs than SDLs, given the relatively safer risk profiles of G-Secs. Also, we are of the view that the yield curve’s rise is steep till 2028, and after that its rise is relatively less. Since the annual spreads increase till 2028 and then flatten, the six-year point is the attractive point for a predictable passive strategy.” says Sandeep Yadav, Head – Fixed Income, DSP Asset Managers.