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DSP Mutual Fund (MF) on Thursday announced the launch of the industry’s first passive flexicap fund.
The scheme, centred around the quality theme, will mirror the Nifty500 Flexicap Quality 30 Index, which includes the top 10 stocks each from the Nifty100 Quality 30, Nifty Midcap150 Quality 50, and Nifty Smallcap250 Quality 50 indices.
The fund house expects the quality theme, which has underperformed the ‘value’ theme in recent years, to witness mean reversion going forward.
According to the fund house, the scheme — DSP Nifty500 Flexicap Quality 30 Index Fund — addresses key challenges faced by investors, such as identifying high-quality stocks and automating optimal allocation to large, mid, and small caps.
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Apart from stock selection and the quality theme, the fund house will leverage relative momentum in largecap and small- and midcap (SMID) segments of the market to generate alpha. The scheme will have a 67 per cent allocation in SMIDs and 33 per cent in largecaps when the relative momentum is in favour of SMIDs. In case of a shift in trend, largecaps will have a 67 per cent allocation.

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