DSP Mutual Fund To Launch DSP Nifty500 Flexicap Quality 30 Index Fund

Mumbai, July 28 – DSP Mutual Fund has received regulatory clearance from the Securities and Exchange Board of India (SEBI) to launch its new passive equity scheme, the DSP Nifty500 Flexicap Quality 30 Index Fund, an open-ended fund designed to replicate the performance of the Nifty500 Flexicap Quality 30 Index.

The Nifty500 Flexicap Quality 30 Index Fund will passively track 30 high-quality low-volatility stocks from large, mid and small caps, and will  provide a diversified exposure across the Nifty500 universe.

SEBI Approval Enables New Index-Based Mutual Fund Launch

The fund aims to track the Nifty 500 Flexicap Quality 30 TRI, thereby exposing investors to high-quality companies selected from a diversified basket of 30 companies across large-cap, mid-cap, and small-cap segments. SEBI has granted its approval, which is compliant with the requirements on index benchmarking and product launch as outlined in Clause 1.9 of its Master Circular as of June 27, 2024.

The NFO will offer units at ₹10 each and will remain open for a minimum of 3 working days and a maximum of 15 days. Units will reopen for continuous sale and repurchase within five business days from allotment.

Investment Framework and Strategy

The scheme adopts a passive investment style and will invest 95-100% in the stocks of the Nifty 500 Flexicap Quality 30 Index and up to 5% in cash for liquidity purposes. It will track the Index but will include no stock selection, but it will rebalance regularly. The SEBI guidelines state that the tracking error expected is within 2% of the index annually in normal conditions.

Portfolio Composition: Top Holdings Across Market Caps

As per the index structure (data as of March 28, 2025), the index includes:

• Large Cap: 66.7% (e.g., Hindustan Unilever, HDFC Bank, TCS, Infosys)
• Mid Cap: 16.7% (e.g., Cummins India, APL Apollo Tubes, Colgate Palmolive)
• Small Cap: 16.6% (e.g., CDSL, CAMS, Indian Energy Exchange)

All stocks are selected based on quality metrics and six-month average free-float market capitalization, with equal weights within each segment. The index is rebalanced quarterly and reconstituted semi-annually.

Scheme Details

No leverage or short-selling will be permitted under the fund, and derivative usage will be limited to 20% for rebalancing and cash equitization purposes only.

Regulatory Compliance & Disclosures

NET ASSET VALUES (NAVs) will be published daily by 11 PM, and SEBI guidelines will publish the half-yearly portfolio and financial reports. Tracking Error & Tracking Difference will be disclosed by Clause 5.15 of the SEBI Master Circular.

By Clauses 12.24 and 12.25 of the SEBI Master Circular, DSP Mutual Fund will ensure that the cumulative gross exposure does not exceed 100% of the net assets of the scheme.

About DSP Mutual Fund

DSP Asset Managers Private Limited manages DSP Mutual Fund and is part of the nearly 160-year-old DSP Group. The AMC is known for its suite of active and passive equity, debt, and ETF products. It operates under SEBI’s Mutual Fund Regulations and is headquartered at Mafatlal Centre, Nariman Point, Mumbai.

Investors may visit www.dspim.com to access the full Scheme Information Document (SID), risk factors, TER, and disclosures.

REF: https://www.sebi.gov.in/filings/mutual-funds/jul-2025/dsp-nifty500-flexicap-quality-30-index-fund_95627.html

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