NFO Alert: DSP Mutual Fund Launches Nifty Midcap 150 Index Fund

DSP Mutual Fund launches a new passive scheme, the DSP Nifty Midcap 150 Index Fund, based on the Nifty Midcap 150 TRI. It will be available at ₹10 per unit during the NFO, and later at market-linked NAV. The scheme aims to mirror the index as closely as possible, without any guaranteed returns.  

Investment Objective and Scope 

The fund’s objective is to generate returns that are in line with the performance of the Nifty Midcap 150 Index, subject to tracking error. It will invest in the same stocks and follow the weightage of the index. DSP mentions that it cannot assure achievement of the stated objective.  

Portfolio Allocation 

The scheme will hold 95% to 100% of its assets in equity and equity-related instruments that form part of the Nifty Midcap 150 Index. Up to 5% may be parked in cash or cash equivalents such as Treasury Bills, REPO, Government securities, and Tri-party REPO for liquidity purposes. Derivatives may be used temporarily, with an overall exposure limit of 20% of net assets.  

Costs and Investor Requirements 

The estimated annual expense ratio is up to 1% of daily net assets. No exit load has been specified for redemptions. A minimum of ₹100 is required to invest during the NFO and on an ongoing basis. Stamp duty of 0.005% will apply on unit purchases, while distributor transaction charges have been discontinued as per SEBI guidelines.  

Operational Details 

The fund must deploy NFO proceeds within 30 business days from the date of allotment, with a possible 30-day extension under exceptional circumstances. Tracking error is expected to remain within 2%, though factors such as index rebalancing, corporate actions, and liquidity conditions may cause variation.  

Read More: NFO Alert: DSP Nifty Smallcap 250 Index Fund NFO Opens on November 24, 2025! 

Conclusion  

This index fund provides exposure to a basket of mid-sized listed companies through a rules-based replication of the Nifty Midcap 150 Index. It follows a passive investing approach with no active stock selection by the fund manager. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal 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 the related documents carefully before investing.