DSP Mutual Fund launches S&P BSE Liquid Rate ETF: Should you invest?

The scheme will invest in overnight instruments with 1D maturity.

Key features

The DSP S&P BSE Liquid Rate Index is known for its stable and relatively low-volatility return profile, attributed to its investments in low-risk securities within overnight markets, DSP Mutual Fund said.

An additional advantage of the DSP BLR ETF is its potential utility as a cash equivalent margin for trading, subject to approval from the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund, emphasised the versatility of the DSP BLR ETF.

He noted, "DSP S&P BSE Liquid Rate ETF is designed to always let investors’ money remain in action and hence makes it a useful product for brokers with large retail clients, PMS providers, F&O brokers, institutions who invest in direct equities HNIs and retail investors who trade on the stock exchange."

Suitability

As per the fund house, the scheme is particularly suited for investors who have funds idling in margin accounts, which typically yield no returns.

By parking their capital in units of the DSP BLR ETF, investors may potentially earn additional returns while ensuring their money remains actively utilised.

Conclusion

While the DSP BLR ETF presents a decent investment opportunity with its conservative approach and potential for stable returns, investors should exercise caution and conduct thorough due diligence before investing.

As with any investment, there are inherent risks, and past performance is not indicative of future results.

Investors should assess their risk tolerance and investment objectives carefully before making any decisions.

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