DSP Mutual Fund Files Draft for CRISIL-IBX Financial Services 3 to 6 Months Debt Index Fund

DSP Mutual Fund has filed draft documents with SEBI for a new scheme: the DSP CRISIL-IBX Financial Services 3 to 6 Months Debt Index Fund. The fund falls under the index fund category and will be structured as an open-ended constant maturity index fund.

Fund Objective and Structure

The investment objective is to track the performance of the CRISIL-IBX Financial Services 3 to 6 Months Debt Index by investing in debt instruments with residual maturities between three and six months. These include Commercial Papers (CPs), Certificates of Deposit (CDs), and corporate bond securities. 

The fund does not aim to outperform the index, but to replicate its performance, subject to tracking error.

Asset Allocation and Instrument 

The scheme intends to allocate 95% to 100% of its assets to securities forming part of the underlying index. Up to 5% may be held in cash or cash-equivalent instruments such as treasury bills, government securities, and repos with maturities under 91 days.

There will be no exposure to derivatives, overseas securities, securitized debt, or instruments with special features. The scheme will also not engage in short selling or stock lending.

Index Composition and Rebalancing

The index comprises securities from financial service issuers rated AAA. At any point, the fund must include at least 8 issuers, with no single issuer exceeding 15% of the portfolio. Rebalancing will occur within 7 calendar days in the event of changes to index constituents or within 30 days if a security is downgraded below the index criteria.

Other Details

The New Fund Offer (NFO) gives both Growth and Income Distribution cum Capital Withdrawal (IDCW) options. The minimum application amount is ₹100. There is no exit load on redemptions. Units will be priced at ₹10 each during the NFO period. The fund will not be listed on exchanges and will reopen for repurchase and sale within five business days of allotment.

Conclusion 

The scheme follows a passive investment approach with a fixed maturity strategy, limiting exposure to short-term, high-rated debt instruments. Its structure and rebalancing mechanism are aligned with index requirements, offering predictability in portfolio composition.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.