DSP MF launches its index fund focussing on small caps

DSP Mutual Fund has launched DSP Nifty Smallcap250 Quality Index Fund, an open-ended passive factor fund investing in Nifty Smallcap 250 Quality Index Fund.

Out of the 250 stocks in the Nifty Smallcap250 universe, the index applies exclusion criteria and stock selection criteria to filter out companies which do not make the cut and choose 50 stocks that fit the criteria. The quality filters include return on equity, debt to equity and earnings per share.

In a press release, Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Mutual Fund said, “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 with an aim 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.”