DSP to launch a new NFO in the index fund category: DSP Nifty Midcap 150 Quality 50 Index Fund
DSP Mutual Fund is launching a new index fund. The DSP Nifty Midcap 150 Quality 50 Index Fund, tries to replicate the Nifty Midcap 150 Quality 50 Index as closely as possible.
The New Fund Offer (NFO) period for the DSP Nifty Midcap 150 Quality 50 Index Fund is from July 18th 2022, to July 29th 2022. The scheme re-opens for continuous repurchases from August 8th 2022.
Notes from the Fund ManagerAre you someone who always picks the ripest of the fruits when shopping? No matter what you’re in the market for, big or small, you’ll agree: #QualityMatters!
We won’t be surprised if this is something you obsess over, when you invest as well. Which is why, in November 2021, we launched a mid-cap based Exchange Traded Fund (ETF) that focuses on quality. However, many of our investors who don’t have demat accounts asked us to give them an easier-to-invest format for this fund. So now, we are launching its cousin in an index fund format.
Introducing DSP Nifty Midcap 150 Quality 50 Index Fund
It simply puts your money in 50 quality stocks from the Indian midcap universe, by investing in the Nifty Midcap 150 Quality 50 Index.
How does this index work?
On the 150 companies in Nifty Midcap Index, special quality filters are applied
These filters include Return on Equity, Financial Leverage and Earnings Growth
Only 50 stocks make it to the index, and we invest with the goal of matching this index
But why? Does quality really matter in midcaps?
People invest in midcaps in the hope that these mid-sized companies will grow to become large sized blue chip stocks and deliver outsized returns. However, you need to know that 85%# of mid cap stocks don’t ever end up becoming large caps. Which means identifying those stocks that have a better probability of turning into market leaders and doing well is critical when you try to invest in this space
How well has this strategy performed in the past?
100% of the times over any 5 & 10 years period1, Nifty Midcap 150 Quality 50 TRI has outperformed its parent index Nifty Midcap 150 TRI.
100% of the times over any 10 year period1, Nifty Midcap 150 Quality 50 TRI has outperformed the average of all actively managed midcap funds
Needless to say, but we’ll remind you anyway: it has a relatively lower expense ratio compared to that of actively managed mid-cap funds.
Sounds great? But read this too.
It is our responsibility to remind you that this is an equity fund and that too in the highly risky midcap space. Therefore, don’t expect it to be an easy ride. Be prepared to face short term NAV fluctuations and train yourself to stay resilient over the long term.
So anyone who believes #QualityMatters is invited to shop with us 😊
Know more details here
NFO Closes 29th July 2022. Don’t miss out!
DSP Nifty Midcap 150 Quality 50 Index Fund NFO Details
|Fund Name||DSP Nifty Midcap 150 Quality 50 Index Fund|
|NFO Opening Date||July 18th 2022|
|NFO Closing Date||July 29th 2022|
|Re-open Date||August 8th 2022|
|Type of Fund||Open-ended equity scheme|
|Fund Manager||Mr Anil GhelaniMr Diipesh Shah|
|Minimum Investment Amount||INR 500|
|Minimum Additional Purchase Amount||INR 500|
|Benchmark||Nifty Midcap 150 Quality 50 TRI|
|Plans and Options||Regular Plan & Direct Plan, Growth Option & Income Distribution cum Capital Withdrawal (IDCW) Option|
All additional investment amounts should be multiple of INR 1/-
Minimum SIP/SWP/STP for Quarterly frequency is INR 500/-
Should You Invest DSP Nifty Midcap 150 Quality 50 Index Fund?
DSP Nifty Midcap 150 Quality 50 Index Fund is an index fund that invests in the same stocks and in the same weightage constituting the Nifty Midcap 150 Quality 50 Index. Since midcap stocks can offer good potential for growth, they are prone to significantly higher risk. Thus, it is primarily meant for investors seeking long-term wealth creation.
Therefore, investors with a high-risk tolerance and seeking exposure to an equity scheme and midcap companies can consider the scheme. The scheme aims to offer good diversification by investing across quality 50 mid-cap stocks across different industries. Since it is a pure equity scheme investing in mid-cap stocks, it makes the scheme highly volatile. Thus, investors with high-risk tolerance levels and a long-term investment horizon (5+ years) can consider the scheme.
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Mr Anil Ghelani
Mr Anil is currently the Head of Passive Investments & Products. He has been associated with DSP Group since 2003 and assumed many roles during his career. Prior to joining DSP, he worked at IL&FS Asset Management Company and S.R. Batliboi, a member firm of EY. Mr Ghelani is a CFA Charter Holder, CFA Institute USA, Chartered Accountant, and also holds a Bachelor of Commerce degree (University of Mumbai). Furthermore, he is currently serving in a volunteer capacity as a Director and Vice Chairman of the CFA Society India. Also, he is currently managing and co-managing 5 funds at DSP.
Mr Diipesh Shah
Prior to joining DSP, he was with JM Financial, Centrum Broking, IDFC Securities, ICICI Securities and IIFL Capital Pte Ltd Singapore. In 2018, Diipesh was rated 22nd in the category of Best Salestrader and 69th in the India Best Salesperson category at the Asia Money Poll.
Mr Shah holds a B Com degree, ACA, and is a Candidate in the CFA Program, CFA Institute USA, Level I Cleared. Also, he is currently managing and co-managing 5 funds at DSP.
Following is the indicative asset allocation of the DSP Nifty Midcap 150 Quality 50 Index Fund.
|Types of Instruments||Indicative Allocation Minimum||Indicative Allocation Maximum||Risk Profile|
|Equity and Equity Related Securities of companies constituting Nifty Midcap 150 Quality 50 Index, the Underlying Index||95%||100%||Very High|
|Cash and Cash Equivalents||0||5%||Low to Medium|
DSP Nifty Midcap 150 Quality 50 Index Fund replicates Nifty Midcap 150 Quality 50 TRI performance. This fund primarily invests in the same stocks and proportions as the Nifty Midcap 150 Quality 50 Index. Hence, the DSP fund aims to closely track the benchmark’s return with minimum tracking error. Since the fund invests across quality mid-cap stocks, it is a high-risk investment option. Thus, investors must have a long-term investment approach keeping in mind the volatile nature of such funds.
Investors who understand the mid-cap category and can closely monitor the performance of the mid-cap stocks can consider DSP Nifty Midcap 150 Quality 50 Index Fund. Furthermore, the scheme is aimed at investors looking for exposure to quality midcaps.
Since it is a pure equity passive scheme and quality mid-cap focused, a long-term investment horizon is a must. Also, as the fund does not guarantee returns, keeping a close eye on the investments is advisable.
Frequently Asked Questions
You can invest in the DSP Nifty Midcap 150 Quality 50 Index Fund NFO through any of the following methods:
Offline: By filling out the DSP NFO application and submitting it along with all documents and cheques to the nearest Investor Service Center of CAMS or DSP mutual fund office.
DSP Mutual Fund Website
Online FinTech platforms and mutual fund platforms
Through demat account
Through a mutual fund distributor or agent
The index fund will re-open for subscriptions, switches and redemptions within 5 days from the date of allotment.
DSP Nifty Midcap 150 Quality 50 Index Fund is a pure equity mutual fund that invests in quality mid-cap stocks across market capitalizations and sectors. Thus, the scheme falls under the very high-risk category according to the riskometer. Therefore, investors must understand the risk associated with mid-cap investments. Also, note that the scheme doesn’t guarantee any returns.
The Nifty Midcap 150 Quality 50 index comprises quality mid-cap companies. The diversified portfolio is constructed based on the ‘Quality Filters’ within the midcap universe. Following are the stocks that form part of the index are:
Quality companies that perform well across different market cycles,
Companies that mitigate drawdown, and
Quality companies usually rebound faster on the basis of strong fundamentals and business models.
- ^An open ended scheme replicating/ tracking Midcap 150 Quality 50 Index.
- Based on daily rolling returns over Apr 1, 2005 to Jun 30, 2022. Source: MFIE, NSE.
* Investors should consult their financial advisers if in doubt about whether the Scheme is suitable for them.
These figures pertain to performance of the index and do not in any manner indicate the returns/performance of the Scheme. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments.
For other Scheme details and disclaimers of DSP Nifty Midcap 150 Quality 50 Index Fund, click here.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.