DSP Mutual Fund Launches Four New Midcap and Small-Cap Passive Schemes

DSP Mutual Fund has launched four new passive investment options aimed at providing diversified exposure to India’s midcap and small-cap segments.

 The newly introduced schemes include the DSP Nifty Midcap 150 Index Fund, DSP Nifty Midcap 150 ETF, DSP Nifty Smallcap 250 Index Fund and DSP Nifty Smallcap 250 ETF. 

With these additions, DSP continues expanding its range of index-based solutions for investors seeking long-term, rules-driven market participation.

Index Composition and Market Representation

The schemes replicate the Nifty Midcap 150 and Nifty Smallcap 250 indices, which cover companies ranked 101–250 and 251–500 within the Nifty 500 universe. These indices offer deeper market exposure beyond large caps, giving investors access to high-growth emerging businesses. 

While the Midcap 150 represents companies with relatively stable earnings profiles, the Smallcap 250 captures a wider set of industries such as healthcare equipment, capital markets, textiles, building materials and industrial products.

Historical Performance Trends

According to historical analysis as of October 31, 2025, the Nifty Midcap 150 TRI generated average 10-year rolling returns of 16.2%, outperforming the Nifty 500 TRI’s 12.6%. The Nifty Smallcap 250 TRI delivered 13.5% average 10-year rolling returns in the same period. 

While both indices exhibit periods of higher drawdowns due to increased volatility, return outcomes improve over longer investment horizons, making them suitable for patient investors.

Portfolio Overlap and Passive Strategy Benefits

DSP highlighted that these indices maintain low overlap with actively managed portfolios. The Midcap 150 index shares 32% common holdings with active midcap funds, while the Smallcap 250 overlaps only 18% with active small-cap funds. This allows investors to use these passive schemes alongside active strategies without excessive duplication.

Also Read: India's Gold and Silver Mutual Fund Assets Cross ₹1 Lakh Crore!

NFO Period and Investment Approach

The New Fund Offers will remain open from November 24 to December 8. The schemes aim to replicate the total return versions of their respective indices, subject to tracking error. DSP emphasised that past index performance does not guarantee future results.

Conclusion

With the launch of these four passive products, DSP Mutual Fund expands its offerings for investors seeking structured, diversified exposure to midcap and small-cap opportunities. The new schemes provide a disciplined, rules-based approach suitable for long-term wealth creation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.