Synopsis:
SIP recommended Quality-Driven Fund, Built for Resilience
Mumbai, August 7, 2025: DSP Mutual Fund launched the DSP Nifty500 Flexicap Quality 30 Index Fund*, a first-of-its-kind low-cost flexicap strategy that combines quality-only stocks and dynamic market cap allocation based on momentum triggers. This fund will mirror India’s first flexicap index, designed to help investors navigate shifting equity markets confidently.
The new fund addresses the most common challenges faced by equity investors: identifying high quality stocks, automating optimal allocation to large, mid and small caps and doing all this at a low cost.
Nifty500 Flexicap Quality 30, which the fund replicates, uses the quality factor to identify 30 fundamentally strong companies- 10 from large, mid and small caps, assigning equal weight to stocks within each segment. Quality is guided by parameters like high ROEs, low debt and strong earnings growth.
Further, the index uses flexicap momentum as the driver to allocate between the 3 segments based on relative performance potential. It does this by utilizing a clear rule-based signal- the ratio of small & midcaps (SMID) to large caps compared to its 200 Day Moving Average. This signal will be used for every quarterly rebalance, resetting SMID allocation to either 33% or 67% (2/3rd). Similarly, large cap allocation will also be reset to either 33% or 67% at the end of every quarter.
Nifty500 Flexicap Quality 30 Index has delivered a CAGR of 18.1% since October 2009, significantly outperforming the Nifty 500 TRI, which returned 13.0% during the same period. The index has also demonstrated resilience during volatile periods, thanks to its focus on quality. Over rolling 5-year SIP periods, the index has delivered a median return of 20.3%, compared to the 15.8% returns of Nifty 500 TRI during the same period.**
This simple fund design is based on first principles, and investors benefit from investing in it as it removes the need to constantly monitor market segments or switch between schemes- something that most end up doing, incurring costs along the way. Its passive structure also means rebalancing occurs without tax outflow or exit loads, not typically available in DIY or actively managed flexi/multi-cap strategies.
“Two conditions are important for investors to achieve compounding – investing in high quality businesses at reasonable valuations. The quality factor is going through sharp price and time correction.
We have always believed in launching funds when the strategy is in low cycle. Hence, we are introducing the first flexicap index fund which invests in 30 high quality companies across all market caps.” said Kalpen Parekh, Managing Director & CEO, DSP Mutual Fund.
“DSP Nifty500 Flexicap Quality 30 Index Fund brings together the best of both worlds, dynamic flexicap allocation and high-quality stock selection, using a transparent, rules-based approach.
It’s designed to reduce noise, eliminate complexity, and help investors participate meaningfully across market cycles,” said Anil Ghelani, CFA – Head – Passive Investments & Products at DSP Mutual Fund.
“Most investors struggle with market timing and allocation decisions. This strategy addresses those challenges through a smart combination of flexi-momentum-based rebalancing and disciplined quality filters, delivering both agility and resilience,” said Sahil Kapoor, Market Strategist and Head – Products at DSP Mutual Fund.
With this launch, DSP reinforces its commitment to investor-first innovation by offering strategies that are clean, rules-based, cost-efficient, and designed to work across market environments.
The New Fund Offer (NFO) for the DSP Nifty500 Flexicap Quality 30 Index Fund will open for subscription on August 8th, 2024, and will close on August 22, 2025. To learn more and access the factsheet, visit: www.dspim.com
DSP Nifty500 Flexicap Quality 30 Index Fund is an open ended scheme replicating / tracking Nifty500 Flexicap Quality 30 Index Source – NSE, Internal. Data for the period 1st Oct, 2009 to 30th Jun, 2025.
We recommend investments via SIP. The scheme allows other modes including lumpsum / STP. For details w.r.t. available mode of investments, please refer scheme information document.
About DSP Mutual Fund
DSP Mutual Fund has an over 25-year track record of investment excellence. Today, we have the honour of managing money for over 60 lakh investors from all walks of life: hard-working salaried individuals, high-net-worth individuals, NRIs, small and mid-sized business owners, large private & public corporations, trusts and foreign institutions.
We take great pride in knowing that we play a key role in the creation of wealth for all our investors and will always continue to be an organization with a purpose – it is our responsibility to make a real difference to the lives of our investors.
DSP Mutual Fund is backed by the 160+ year old DSP Group. Over the past one and a half centuries, the family behind the Group has been very influential in the growth and professionalization of capital markets and money management business in India.
Our investors’ interests will always remain at the core of our business, and we will continue to maintain a relentless focus on doing what’s best for them, as they #InvestForGood.
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About DSP Passive Funds
DSP Mutual Fund has passive investment products across all asset classes – Equity, Debt, Commodities, and the entire market range of large, mid and small. We offer a wide range of products of index funds, ETFs and rules based smart beta products.
In line with global best practices, we have set up a dedicated Investment Team for passive investments, rather than a common Investment Team responsible for both active and passive funds. This ensures closer attention on the portfolios and demonstrates the business focus that DSP has for ETFs.
Visit us dspim.com/invest/mutual-fund-schemes/low-cost-fund for more about Passive Funds
