DSP Mutual Fund Introduces ‘Quality-Focused’ Smallcap Fund – DSP NSQ50IF

DSP Mutual Fund has unveiled the DSP Nifty Smallcap250 Quality 50 Index Fund (DSP NSQ50IF), a groundbreaking ‘Quality-Focused’ Smallcap Fund. This open-ended scheme tracks the Nifty Smallcap250 Quality 50 Index, applying meticulous exclusion and selection criteria to identify 50 quality stocks from the broader Nifty Smallcap250 universe. Anil Ghelani, CFA, Head of Passive Investments & Products at DSP Mutual Fund, highlights the fund’s objective of mitigating capital loss risk by concentrating on ‘Quality’ companies with robust fundamentals. Investors are encouraged to consider the long-term potential of small caps via the SIP route, with the New Fund Offer set to open on December 5th, 2023.

1. DSP Mutual Fund has introduced the DSP Nifty Smallcap250 Quality 50 Index Fund (DSP NSQ50IF), marking the first-ever ‘Quality-Focused’ Smallcap Fund.
2. The new fund is an open-ended scheme designed to track the Nifty Smallcap250 Quality 50 Index.
3. The Nifty Smallcap250 Quality 50 Index applies exclusion and selection criteria from the broader Nifty Smallcap250 universe to filter out companies that do not meet specific criteria, ultimately selecting 50 quality stocks.
4. Anil Ghelani, CFA, Head – Passive Investments & Products at DSP Mutual Fund, emphasizes that small caps have the potential for significant returns over the long term, but the vast and less-studied nature of this space presents challenges for investors.
5. The passive offering aims to mitigate the risk of capital loss by focusing on ‘Quality’ companies with strong fundamentals, reducing exposure to wealth-destroying stocks.
6. The New Fund Offer (NFO) for DSP NSQ50IF is set to open for subscription on December 5th, 2023, and will conclude on December 15th, 2023.
7. Investors are advised to consider investing in DSP NSQ50IF through the SIP (Systematic Investment Plan) route for a better experience across market cycles.
8. Long-term SIP returns in the Quality Index have demonstrated consistent performance irrespective of market peaks or lows, providing better returns compared to the broader index.
9. The Quality Index has shown outperformance both in market rallies and during declines when compared to the broader index.
10. Historical data indicates that the likelihood of better returns increases, and the risk of negative returns decreases with a longer investment tenure for the Quality Index in comparison to the Broader Index. During specific periods, SIP returns in the Quality Index outperformed lump sum investments in the broader index.