DSP Mutual Fund announced the launch of DSP Nifty IT ETF, an open-ended exchange traded fund (ETF) replicating/tracking the Nifty IT index.The ETF offers investors an opportunity to benefit from the good showing of Indian IT companies over the long term. The Indian IT sector has consistently grown, contributing significantly to India’s GDP and market share.
Indian IT companies have seen less variability in earnings, reducing surprises and receiving higher earning multiples from investors. This growth has led to a more stable and predictable industry.The Indian IT sector offers global exposure to revenue flows, diversifying equity portfolios from domestic risks.
Its financial strength is reflected in higher ROE and ROAs than global peers, and its valuation parameters are attractive. However, the Nifty IT index has been underperforming the Nifty 50 for the past 1.5 years, causing a turnaround in performance and declining IT sector weightage in the Nifty 50. Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Mutual Fund said, “We believe that at current levels, valuations are approaching average multiples, and many companies in this sector appear financially healthier and relatively cheaper when compared to global IT peers”.
