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DSP Investment managers announced the launch of DSP Nifty 50 Equal Weight ETF on the very first Monday of this week. The ETF is India’s first exchange-traded fund which is based on the Nifty 50 Equal Weightage Index.
The new fund offer NFO opens for subscription on October 18th and closes on October 29th, after which it could be bought and sold on the major stock exchanges, the company said.
Before taking a deep dive into the Nifty 50 Equal Weight Index lets take a quick glance at ETF:
An ETF is a basket of securities whose shares are sold on the stock exchanges i.e. NSE and BSE. They offer similar features and potential benefits like mutual funds, stocks and bonds.
ETFs are similar to stocks as they provide investors with a facility to trade throughout the day at prices that change based on supply and demand.
Like stocks, ETFs also possess some features of mutual funds as ETF stocks represent partial ownership of a portfolio built by professional managers.
There are different types of ETFs, each with a different investment focus.
Here are some of the most common ETFs.
The returns of Diversified Passive Equity ETFs are completely dependent on the performance of widely used equity market benchmarks such as the S&P 500, the Dow Jones Industrial Averages and more.
Niche passive equity ETFs, are those whose returns are based on the performance of S&P 500 industry subgroups or Russell 2000 small companies.
These ETFs provide investors with focused exposure to help them fine-tune their portfolio strategies.
As with passive diversified funds, these niche portfolio funds are generally made up of the same stocks that are used to calculate their benchmarks.
Active Equity ETFs allow their managers to use their own judgment when choosing investments rather than being rigidly tied to a benchmark index.
Active ETFs can have the potential to outperform a market benchmark, but they can also carry higher risk and higher costs. 4,444 bond ETFs focus more on bonds than stocks.
Large fixed-income ETFs are those that actively traded on the stock market but provide low returns or steady returns to the investors. In other words, the returns generated from large fixed income are not very high yielding.
In an equal weight index, each stock present in it receives equal weight. For instance, if the method is applied to the index Nifty 50, then the equal weightage index will own the same 50 companies of Nifty 50 and will have 2% weight of each company.
This method is not like the current stock market cap design where some stocks hold a large weight such as 9-10% and many stocks in the lower tail will get only 0.3%.
This provides all the companies with a fair chance to contribute equal returns than completely dependent on the top 10 company stocks.
In Nifty 50, the stock weights are decided on the basis of market capitalization and weightage changes based on the movement of the stock market. Hence, the returns generated from the market are slanting towards the stocks that possess the highest weight.
In the Nifty 50 Equal Weight Index, equal weights are assigned to each company’s stocks and the weight of each stock is reset to equal weight every quarter. Here, they provide equal opportunity for every stock to perform.
The DSP Equal Nifty 50 ETF operates on the two fundamental investment principles that invest in industry leaders who can navigate the cycles of the stock market with better diversification between companies and sectors with equal share weights, offering low specific risks and low industry concentration compared to Nifty.
Aside from a lower-cost diversified portfolio, the Nifty 50 ETF has the same weighting benefits of ease of purchase and real-time stock trading.
The equal index is reweighted quarterly. Because of this quarterly rebalancing, an equally weighted portfolio has a built-in profit mechanism that buys the underperforming at low prices and sells the best performing at high prices.
The new fund offering opens for subscription on October 18 and ends on October 19, after which it can be bought and sold on the stock exchanges.
Kalpen Parekh, Dr MD and CEO of DSP Investment managers has said that when we explore this concept of equally-weighted indices around the world, we find that the same weights tend to produce better returns than market capitalization-weighted indices over long periods of time.
This is done because all companies have the opportunity to participate, not just a few. Such a strategy has its underperforming phase when the benefits of the economy polarize on selected companies, as they have been for the past five years.
However, since good companies in all industries grow and create long-term value, a balancing strategy gives each company significant weight in the index.
The same weighting also ensures that the sector with the most ownership is at risk at all times, ”Parekh said.
Anil Ghelani, CFA, Director of Investments and Passive Products, DSP Investment Managers, emphasized that equally weighted strategies exploit certain market inefficiencies due to behavioral distortions.
Since the strategy is not controlled by an excess of optimism in specific actions, the same weighting takes the benefits of certain stock market inefficiencies caused by behavioral biases.
These inefficiencies have contributed to the balanced index strategy eclipsing traditional index strategies based on market capitalization, ”says Ghelani.
हम एक अनोखा बुल रन देख रहे हैं, जहां महंगाई और बढ़ती बॉन्ड यील्ड की सभी चिंताओं को नजरअंदाज करते हुए बूल्स 18500 के स्तर की ओर बढ़ रहे हैं, वही हमने लंबे समय से कोई बड़ी गिरावट नहीं देखी है।
इस बुल रन का सबसे दिलचस्प हिस्सा यह है कि यह संस्थागत निवेशकों के प्रवाह की परवाह नहीं कर रहा है जहा पिछले सप्ताह नेट संस्थागत निवेश नेगेटिव रहा वही निफ्टी ने पिछले सप्ताह के प्रत्येक कारोबारी सत्र में अपनी नई ऊंचाई को छुआ तथा 2.5% की साप्ताहिक बढ़त के साथ अपने उच्चतम स्तर पर समाप्त हुआ।
FII ने केवल 1037 करोड़ रुपये की बाजार में खरीददारी की जबकि DII ने 3296 करोड़ की बिकवाली की, इसलिए संसस्थागत निवेशकों द्वारा नेट 2259 करोड़ रुपये की बिक्री हुई। बाजारों में परिस्थिति बदल रही है और हम रिटेल निवेशकों की ताकत देख रहे हैं क्योंकि एसआईपी मार्ग के साथ-साथ डायरेक्ट इक्विटी मार्ग के माध्यम से रिकॉर्ड इनफ्लो हो रहा है।
ये इनफ्लो पिछले बुल रनों की तुलना में ज़्यादा मज़बूत दिख रहा हैं क्योंकि इन निवेशकों का दीर्घकालिक दृष्टिकोण है और हर गिरावट पर खरीदारी के रुख के साथ शार्ट टर्म अस्थिरता से निपटने के लिए तैयार हैं, हालांकि इन निवेशकों के स्वभाव की वास्तविक परीक्षा थोड़े बड़े करेक्शन में होगी क्योंकि अभी तक नए निवेशकों ने बाजार में कोई बड़ी मुनाफावसूली नहीं देखी है।
अगर हम डेरिवेटिव डेटा के बारे में बात करे तो इंडेक्स फ्यूचर में FII का लॉन्ग एक्सपोजर 67% है, जबकि पीसीआर 1.53 मार्क पर है, जो बाजार में कम्फर्टेबले लेवल का संकेत देता है, हालांकि 21 अक्टूबर की एक्सपायरी के लिए ओपन इंटरेस्ट पोजीशन बिखरी हुई है, जहां पर कॉल ऑप्शन में OI 18500-19000 की रेंज में है जबकि पुट ऑप्शन के लिए यह 18300-18000 जोन है।
टेक्निकल चार्ट पर 18500 एक तत्काल और मनोवैज्ञानिक रेजिस्टेंस है, जबकि 18700 एक अपस्लोपिंग ट्रेंडलाइन रेजिस्टेंस होगा। वही दूसरी तरफ, 18250 एक तत्काल सपोर्ट स्तर है जबकि 18000 -17950 किसी भी मुनाफावसूली पर महत्वपूर्ण सपोर्ट जोन होगा।
निफ़्टी के मुकाबले बैंकनिफ्टी बेहतर प्रदर्शन कर रहा है और 40000 के महत्वपूर्ण रेजिस्टेंस को टेस्ट कर सकता है और 39000-38800 का क्षेत्र तत्काल और मजबूत सपोर्ट क्षेत्र बन गया है जबकि 38100-37900 महत्वपूर्ण सपोर्ट क्षेत्र होगा।
IT सेक्टर अंडरपरफॉर्म कर सकता है क्योंकि यह लोअर हाई और लोअर लो फॉर्मेशन बना रहा है जबकि मेटल सेक्टर नए हाई के तरफ बढ़ सकता है । पीएसयू बैंक भी आने वाले दिनों में अपनी मजबूती जारी रख सकते हैं।
अगर अगले सप्ताह के संकेतों की बात करें तो सितम्बर के तिमाही नतीजे बाजार पर हावी रहेगी जहां बाजार सोमवार को एचडीएफसी बैंक और एवेन्यू सुपरमार्ट्स (डी-मार्ट) की कमाई पर बाजार रियेक्ट करेंगे , साथ ही अल्ट्राटेक सीमेंट, एसीसी, एचयूएल, नेस्ले, एशियन पेंट्स, जेएसडब्ल्यू स्टील, एचडीएफसी लाइफ, और रिलायंस इंडस्ट्रीज सप्ताह के दौरान अपने तिमाही नतीजे घोषित करेगी ।
तिमाही नतीजे के अलावा अन्य ग्लोबल संकेत महत्वपूर्ण होंगे जहां ग्लोबल बाजारों ने एक करेक्शन के बाद अच्छा प्रदर्शन करना शुरू किया है। कमोडिटी की बढ़ती कीमतें अभी भी चिंता का विषय हैं लेकिन बाजार फिलहाल इस तथ्य पर विचार नहीं कर रहा है। डॉलर इंडेक्स और यूएस बॉन्ड यील्ड थोड़ी ठंडी हुई लेकिन आने वाले दिनों में बाजार की नजर इस पर होगी।
A financial service firm (AMC) is one that offers a large variety of mutual fund investment strategies.
In India as of now, there are 44 asset management companies (February 2017). The private sector includes 35 such AMCs. Association of Mutual Funds in India (AMFI) India includes all asset management companies (AMFI). In 1995, AMFI was established in all registered AMCs in India as a non-profit association.
The SBI Mutual Fund was launched in 1987 and has been active for over 30 years in the Indian Mutual Fund sector. The fund administers approximately 5.4 million investment mandates. It's one of India's oldest and best-known AMCs. SBI Mutual Fund offers systems in different categories to meet different requirements of individuals.
Housing Development Finance Corporation Limited (HDFC) is a firm that is located in Mumbai, India. it is an Indian Financial Services organization. Through its subsidiary HDFC Asset Management Company Limited, HDFC provides mutual fund services. This is India's second-largest AMC.
The AMC works along with Prudential of the United Kingdom and ICICI Bank of India, one of India's largest banks. Prudential Plc. is a major player in the financial services sector in Great Britain. Founded in Mumbai on 13 October 1993, this AMC has an asset basis of about Rs 2,93,338, with more than 1,400 supplies. The AMC provides a wide array and high marked service choices.
AUM, which distributes over 600+ schemes, is presently managing over Rs 2,41,107 crore. The AMC was established by Aditya Birla Group of India and Sun Life Financial Inc. of Canada in 1994 as a joint venture.
From broad equity trading plans to industry-specific plans, the Birla Sun Life mutual fund delivers a variety of mutual fund programmes. There are also debt-mutual funds, hybrid schemes, fund schemes, monthly income plans and offshore funds. It has a large range of investments and a strong financial base.
Since 1988, Kotak's huge client base with investor lakhs has already been created. AMC provides a variety of solutions, catering with new goods to a variety of clients. With minimal SIP commitment of 1000 and 500, Kotak Equity Opportunities Fund, Standard Multicap funds have improved growth.
Founded by the late Dhirubhai Ambani, Nippon India AMC (formerly known as Reliance Asset Management Limited) is one of the most prominent Indian AMCs. It was then partnered with the Japanese Nippon Life Insurance. In 2019, the Insurance company Nippon Life held a 75% interest in the mutual fund, which allowed Anil Ambani to exit the Mutual fund industry. It was then called Nippon India Asset Management Company
Axis Mutual Fund is India's fifth-biggest asset-size mutual fund company. For the quarter ending June 2020, the Fund House would handle assets of Rs 1.34 lakh crore. The fund house's asset size fell by 2,90% from the quarterly number in March 2020. For over 11 years the fund house has existed. Axis Bank Limited controls 74.99% of the funds, while Schroder Singapore Assets Private Limited retains the remaining 25% of the holdings.
Founded in 1963, UTI is one of India's leading asset management firms. As the first mutual fund provider to offer, UTI promises certain reliable returns, Easy and accessible investment in UTI at any time of year. UTI mutual funds schemes are handled by the most acute financial institutions and hence their returns are trustworthy and in accordance with their goals for capital appreciation. The AMC manages 1,53,364 crore rs in AUM with around 1400 products and offers funds in different categories.
The IDFC Mutual Fund is India's ninth-largest asset house. For the quarter ending June 2020, the investment firm manages assets (AUM) worth Rs 1.01 lakh crore. For almost 20 years, the fund house has been around. It enables investors to make quality investments through rigorous research and creation of the product mix while taking the risk profile of their investors into account to support the fund house. In the approximately 46 cities and 280 towns in the nation, the IDFC Mutual Fund holds more than 1 million investors' accounts.
DSP BlackRock Mutual Fund is the world's largest investment management company. It has a record of more than 20 years of investing excellence. An investment host of equities, debt, hybrids, the Fund of Funds, international FoFs etc. which can be used by the investors. The AMC has a highly skilled investing staff.
The Indian Railway Catering and Tourism Corporation (IRCTC) is a Miniratna PSU Owned by Govt. of India through Indian Railways.
It is the only authorized entity to provide certain services to the Indian Railways, including online ticketing, catering, and selling drinking water on trains and at railway stations.
IRCTC shares rallied from 2000 to 4900 level in just four-month. It has been climbing sharply on the stock market, scaling new highs in the stock is now a regular phenomenon.
Reopening of economic activities & pickup in demand in tourism sector also reaching to their pre COVID level boost up the stock price.
Technically IRCTC has given breakout after consolidation above 4000 and forming higher high and higher low chart formation which is bullish in nature.
As IRCTC stock has already rallied a lot from its SME-IPO Price (Issue 315-320), Stock may gain further due to its Monopoly Business Model. IRCTC also aggressively expands in the hospitality business will take the stock to a new high in the upcoming years. So, Long Term investors can buy on dip around level 4000-4100 for 6000+ Target.
घरेलु वायदा सोने में पिछले सप्ताह 1000 रुपये की तेज़ी देखि गई और कीमते 48100 रुपये प्रति दस ग्राम के स्तरों को छू गई। दिसंबर वायदा चांदी भी सप्ताह में 1500 रुपये तेज़ होकर 63800 रुपये प्रति किलो के स्तरों को छुआ।
हालांकि शुक्रवार को कीमती धातुओं में मुनाफा वसूली भी रही। डॉलर जो सोने के विपरीत दिशा में चलता है, में 0.2 प्रतिशत की साप्ताहिक गिरावट दर्ज की गई। पिछले सप्ताह कॉमेक्स वायदा सोना 1800 डॉलर प्रति औंस के ऊपरी स्तरों तक गया जो सितम्बर माह के बाद का उच्चतम स्तर है।
तेल की कीमतों में 80 डॉलर प्रति बैरल के सात साल के उच्च स्तर पर पहुंचने के बाद अंततः मुद्रास्फीति से बचाव और सुरक्षित आश्रय के रूप में सोना अपने लेबल पर खरा उतरा है। लेकिन, उम्मीद से बेहतर खुदरा बिक्री रिपोर्ट और कॉर्पोरेट कमाई के मजबूत आकड़ो ने अमेरिकी बांड यील्ड को उच्च स्तरों पर पंहुचा दिया जिससे गैर उपज वाली संपत्ति सोने में ऊपरी स्तरों पर दबाव रहा।
भारत, अमेरिका और यूरोप के प्रमुख त्योहारों के पहले अच्छे खुदरा बिक्री के आंकड़े, कॉर्पोरेट अर्निंग को आगे भी मजबूत बने रहने का संकेत देते है जिससे अमरीकी शेयर मार्किट डाव जोंस में पिछले सप्ताह 1.5 प्रतिशत की तेज़ी रही।
कोल् आपूर्ति में बाधा आने से चीन और यूरोप में पावर शार्टेज की समस्या बनी हुई है जिसके कारण कच्चे तेल और औद्योगिक धातुओं के भाव में फिर से तेज़ी देखि जा रही है। कच्चे तेल के भाव, औद्योगिक धातुओं के बढ़ते भाव और मजबूत होती खुदरा मांग, मुद्रास्फीति को सपोर्ट कर रही है जिससे सोने और चांदी में तेज़ी बनी रहने के आसार है।
कीमती धातुओं में इस सप्ताह तेज़ी रहने की सम्भावना है। घरेलु वायदा सोने में 47000 रुपये पर सपोर्ट है और 47700 रुपये पर प्रतिरोध है। चांदी वायदा में 62000 रुपये पर सपोर्ट और 64000 रुपये पर प्रतिरोध है।
Corporate Earnings and Macro Data will dictate the trend along with Global Cues.
It was a good week for the Indian market where it outperformed most of its global peers amid worries of global energy crises and inflation worries.
IT and Auto sector added most of the gain while the broader market also did well with a gain of more than 3.5%.
The Q2 earnings season has started with TCS' results which is a minor miss on expectations and we could see some profit booking in the IT sector as IT stocks have rallied a lot in expectation of strong earnings however any correction will be a buying opportunity.
Infosys, Wipro, and HCL tech will come out with their numbers next week therefore we are going to see lots of volatility in the market, especially in the IT sector.
Along with corporate earnings, the market has to deal with macro numbers. The government will release IIP and CPI numbers on 12th October and WPI will be announced on 14th October.
The market is expecting strong growth in industrial production but at the same time, it worries about inflation.
Global factors will also play an important role in the direction of the market.
The headline numbers of US Nonfarm payroll are slightly weak however the internals are strong. The US bond yield is above the 1.6 mark, the Dollar index is above 94 and the price of Brent crude is above $83 that may lead to any correction in the market however market is ignoring all of them for time being as momentum is very strong.
Technically, Nifty is trading near-critical resistance zone of 17950-18000 where it could again witness selling pressure but if it manages to trade above this zone then we could see a rally towards 18200/18300 levels.
On the downside, 20-DMA of 17650 is immediate and important support; below this, 17450 is a critical support level because below 17450 we could see any meaningful correction.
If we talk about the data then the market is lacking FIIs' buying but getting strong support from DIIs, HNIs, and retail investors.
Put call ratio stands at 1.3 level whereas FIIs' long exposure in index future stands at 59% that is neutral to positive. On the options front, the 18000 strike call option has the highest OI of 37lac for14-Oct expiry while the 17800 strike put has the highest OI of 32.7lac therefore 18000 is an important and psychological hurdle.
Banknifty is trading near-critical resistance zone of 3800-38300; above this, we can expect a strong short-covering rally towards 39000 otherwise there is a risk of profit booking where 20-DMA of 37500 is critical support; below this, we can expect further selling pressure towards 36500/36000 levels.
In terms of sector, the Nifty PSU banking index is looking interesting because it is trading near-critical resistance however most of the PSU banks witnessed bullish momentum in Friday's trading session and if the market remains supportive and the Nifty PSU banking index manages to cross-resistance of 2660 then PSU banks may outperform.
Tata wins back Air India that is a historical moment and this is a sigh of relief for the lenders. PSU banks mainly the Bank of Baroda will be the biggest beneficiary as it has substantial exposure to the airliner.
If we talk about the Airline stocks then competition will increase so we could have a sentimental negative impact on listed players but the opportunity of scale is high so the long-term outlook is positive for the overall industry however investors should understand the unsystematic risk of the industry or company.
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