A quality strategy can reduce risk in the mid-cap universe of 150 stocks

Enter gradually, raise exposure once funds have developed track record

The new fund offer (NFO) of DSP Nifty Midcap 150 Quality 50 Exchange Traded Fund (ETF) is on currently. UTI Mutual Fund has also applied to the Securities and Exchange Board of India for launching an index fund based on the same benchmark. These funds will try to replicate the performance of an index derived by applying a few quality filters to the entire mid-cap universe of 150 stocks.

Quality filters

Three criteria have been applied for selecting the 50 stocks in the Nifty Midcap 150 Quality 50 Total Return Index— return on equity (RoE), exclusion of highly leveraged stocks, and includes