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Business News/ Mutual Funds / News/  DSP Mutual Fund launches DSP Nifty Smallcap250 Quality 50 Index Fund. Five things to know
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DSP Mutual Fund launches DSP Nifty Smallcap250 Quality 50 Index Fund. Five things to know

SIP-recommended smart beta Smallcap Fund offers investors access to ‘Quality’ small cap companies with better fundamentals

The New Fund Offer for DSP NSQ50IF will open for subscription on December 5th, 2023, and will close on December 15th, 2023. (iStock)Premium
The New Fund Offer for DSP NSQ50IF will open for subscription on December 5th, 2023, and will close on December 15th, 2023. (iStock)

Mumbai: DSP Mutual Fund announced the launch of the first-ever ‘Quality-Focused’ Smallcap Fund DSP Nifty Smallcap250 Quality 50 Index Fund (DSP NSQ50IF), an open-ended scheme tracking Nifty Smallcap250 Quality 50 Index. Out of the 250 stocks in the Nifty Smallcap250 universe, the index applies exclusion criteria and stock selection criteria to filter out companies that do not make the cut and choose 50 stocks that fit the criteria.

“Smallcaps have the potential for outsize returns when held for the long term. However, the space is inherently vast, relatively less studied, and poses a challenge to investors to find quality companies among small caps. Our passive offering aims to reduce the risk of capital loss by choosing ‘Quality’ companies with better fundamentals to keep wealth destroyers away to a great extent. We recommend investors to invest in DSP NSQ50IF for the long term via the SIP route for a better experience across market cycles," said Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Mutual Fund.

1) The New Fund Offer for DSP NSQ50IF will open for subscription on December 5th, 2023, and will close on December 15th, 2023.

2) Investors are recommended to buy DSP NSQ50IF via the SIP route. 10-Year SIP returns have shown that long-term SIP in the Quality Index has given similar returns irrespective of the market being at peak or lows, and considerably better returns compared to the broader Index. 

3) The Quality Index has also outperformed in rallies and during falls compared to the broader Index. 

4) Data also shows that the probability of better returns increases, and negative returns decrease with longer tenure for the Quality Index compared to the Broader Index.

5) During periods like 10th December 2007 to 10th November 2010, 10th November 2010 to 19th May 2014, and 15th January 2018 to 16th March 2021, when a lump sum in the broader index gave 0% returns, SIP returns in the broader Index was anything between 18 to 41% and that in the Quality Index would have been between 20 to 52% in the same periods.

 

 

 

 

 

 

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Published: 05 Dec 2023, 12:33 PM IST
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