DSP Nifty Midcap 150 Quality 50 Index Fund NFO opens soon: Check features, suitability

Nifty Midcap 150 Quality 50 Index has underperformed in the last 1 year but historically, short-term underperformance by this index is followed by future outperformance.

DSP Nifty Midcap 150 Quality 50 Index Fund NFO opens soon: Check features, suitability
The fund follows a zero-bias, rule-based strategy by replicating the Nifty Midcap 150 Quality 50 Index.

DSP Investment Managers announced the launch of DSP Nifty Midcap 150 Quality 50 Index Fund. This new quality-focused mid cap Fund offers investors an option to invest in mid-cap companies with the potential of higher growth and profitability, lower leverage and relatively stable earnings.

DSP Nifty Midcap 150 Quality 50 Index Fund follows a zero-bias, rule-based strategy by replicating the Nifty Midcap 150 Quality 50 Index.

This index selects 50 companies from the parent Nifty Midcap 150 index based on ‘Quality Scores’ using metrics like return on equity, financial leverage (except for financial services companies) & earning per share (EPS) growth variability of each stock.

Being a passive fund, it will also have a lower expense ratio than most actively managed mid-cap funds. The New Fund Offer for the fund opens for subscription on July 18th, 2022 and closes on July 29th, 2022.

Nifty Midcap 150 index has generated 17.5% CAGR on SIP since inception whiel delivering 100% outperformance, over any 5 or 10 year period, over the Nifty Midcap 150 Index. On average, the index has generated 18.9% CAGR over any 10 year period.

“Quality should not be expected purely by chance- it requires meticulous, intelligent effort. This is especially important for those looking to invest in midcap stocks. The midcap space is notorious for having many stocks that have the potential that never gets realized- our data suggests that more than 4 out 5 mid-sized companies in India never grow to become market leaders, or blue chips- which is when high returns can get unlocked. The DSP Nifty Midcap 150 Quality 50 Index Fund chooses top 50 companies ranked on the basis of three most important quality metrics. The goal is to help investors build their portfolio of mid – caps with a disciplined design to deliver outperformance over the long term.” says Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Investment Managers.

Know before investing
This is a high-risk strategy more suitable for experienced investors or those who have access to expert advice. Consider only if you have a well-set core portfolio & are looking to expose no more than 10-15% of your portfolio towards strategic but high-risk opportunities. Nifty Midcap 150 Quality 50 Index has underperformed in the last 1 year. Historically, short-term underperformance by Quality is followed by future outperformance. Higher the underperformance, higher the future outperformance. Consider investing only if you recognize that to maximize the chance of earning good outcomes, you will need to remain invested for a long period of time.

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