#DSPMutualFund #PassiveInvesting #NFO #Midcap #Smallcap #Nifty150 #Nifty250 #IndexFund #ETF #IndianStockMarket #FinancialNews #InvestmentStrategy #MidcapGrowth #RulesBasedInvesting
MUMBAI: — DSP Mutual Fund has significantly expanded its passive product offering by launching four new schemes focused on India’s burgeoning midcap and small-cap segments. The fund house introduced the DSP Nifty Midcap 150 Index Fund, DSP Nifty Midcap 150 ETF, DSP Nifty Smallcap 250 Index Fund, and DSP Nifty Smallcap 250 ETF.
The New Fund Offers (NFOs) opened for subscription on November 24 and will remain open until December 8, 2025, providing investors with an opportunity to gain structured, low-cost access to companies ranked from the 101st to the 500th largest within the Nifty 500 universe.
The simultaneous launch of both Index Fund and ETF structures for each segment allows investors flexibility in how they access the market. Index funds are generally preferred for Systematic Investment Plans (SIPs) and convenience, while ETFs offer intraday trading liquidity for those with demat accounts.
Historical Outperformance Highlights Long-Term Potential
The schemes are designed to replicate their respective Total Return Indices (TRI), which have historically demonstrated the high-growth potential embedded within India’s broader market segments.
| Index (Total Return Index – TRI) | Average 10-Year Rolling Returns (As of Oct 31, 2025) | Comparative Nifty 500 TRI Return |
| Nifty Midcap 150 | 16.2% | 12.6% |
| Nifty Smallcap 250 | 13.5% | 12.6% |
As the data shows, the Nifty Midcap 150 TRI has delivered superior average returns over the long term compared to the broad-based Nifty 500 TRI. Similarly, the Nifty Smallcap 250 TRI has also outperformed the Nifty 500 TRI over the same ten-year period.
Risk and Long-Term Horizon
Despite the attractive returns, the fund house cautioned that both indices are prone to higher drawdowns compared to broader market benchmarks, reflecting the inherent volatility of smaller companies.
Anil Ghelani, Head of Passive Investments & Products at DSP Mutual Fund, commented on the launch: “Midcaps and small-caps sit at the intersection of innovation and growth in India. Our research shows that disciplined, rules-based exposure, instead of stock picking, has historically rewarded investors who stay invested through cycles. These products are intended to give investors structured access to these market segments, offering a simplified way to participate in broad-based market expansion.”
He further stressed that while the indices show improved return probabilities over longer holding periods, investors must recognize that past index performance is not an indicator of future scheme returns.
🧩 Differentiated Exposure and Index Composition
The new schemes offer unique diversification that differs significantly from most actively managed portfolios:
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Low Overlap with Active Funds: The Midcap 150 index shares only 32% common holdings with active midcap funds, and the Smallcap 250 index overlaps a mere 18% with active small-cap funds. This low overlap means these passive strategies can serve as an excellent complementary allocation for investors who already have active fund exposure, providing true portfolio diversification.
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The Nifty Midcap 150 index specifically tracks companies ranked 101–250, offering exposure to the mid-sized corporate universe with relatively more stable earnings profiles than the smaller-cap segment.
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The Nifty Smallcap 250 index, which tracks companies ranked 251–500, includes a wider array of industries, such as capital markets, industrial products, healthcare equipment, building materials, and textiles, sectors where large-cap representation is often limited. This offers a deep dive into emerging market leaders and high-growth niche segments.
The launch underscores a broader industry trend toward passive investing, driven by the desire for lower costs, transparency, and a straightforward, rules-based approach to capturing market-segment returns.
#DSPMutualFund #PassiveInvesting #NFO #Midcap #Smallcap #Nifty150 #Nifty250 #IndexFund #ETF #IndianStockMarket #FinancialNews #InvestmentStrategy #MidcapGrowth #RulesBasedInvesting
