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.
DSP recommends investors to take the SIP route as valuations (especially in quality small & mid-caps) can be high & unpredictable. SIPs help investors average their purchase cost over time, reduce the risk of catching a peak, and aligns with the philosophy behind this fund: disciplined, long-term investing in quality businesses across cycles.
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 22nd, 2025.
To learn more and access the factsheet, visit: www.dspim.com
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. DSP recommends investors to take the SIP route as valuations (especially in quality small & mid-caps) can be high & unpredictable. SIPs help investors average their purchase cost over time, reduce the risk of catching a peak, and aligns with the philosophy behind this fund: disciplined, long-term investing in quality businesses across cycles. 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 22nd, 2025. To learn more and access the factsheet, visit: www.dspim.com