“This ETF gives investors the option to take sector exposure to the banking sector. This is especially important at the moment because bank shares are available at attractive prices despite the recent rally in the stock markets,” DSP investment managers said in the press release.
The Nifty Bank Index consists of 78% private banks and 22% public sector banks. The index has outperformed the Nifty 50 by 15 points in 23 years. On a 10-year basis, the Nifty Bank Index has outperformed the Nifty 50 by 98%.
However, investors should be aware of some of the risks posed by concentration risk compared to a diversified equity fund, which has lower short-term performance due to exposure to only 12 stocks in the banking sector and higher volatility and volatility. ” said DSP Investment Managers.
“The banking sector is expected to unlock more value due to fundamentals and coupled with attractive valuations, it presents an attractive opportunity for investors. As seen by the long-term performance of the Nifty Bank Index, we recommend investors to consider this product with a long-term perspective. Anil Gelani, Head – Passive Investments and Products, DSP Investment Managers .
Bank funds have posted good returns this year, with hedge funds leading the charts with double-digit returns on the back of a rally in PSUs.
“Banking stocks are currently the top contributors among all sectors in the major indices. The top 5 banks are also seeing strong loan growth and asset quality improvement. Banks have benefited from post-VID net interest margin expansion. Strong loan growth and improvement in operating margins and equity for banks. Return as a theme are other positives that indicate a healthy outlook for the bank,” the statement said.