DSP Investment Managers announced the launch of DSP Nifty Midcap 150 Quality 50 Index Fund on Monday. This new mid cap fund offers investors an option to invest in mid-cap companies with the potential of higher growth and profitability, lower leverage and relatively stable earnings, the company said in its media release.
The New Fund Offer (NFO) which opened today will closes on 29 July, the company release said.
DSP Nifty Midcap 150 Quality 50 Index Fund follows a zero-bias, rule-based strategy by replicating the Nifty Midcap 150 Quality 50 Index.
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This index selects 50 companies from the parent Nifty Midcap 150 index based on ‘Quality Scores’ using metrics like return on equity, financial leverage (except for financial services companies) & earning per share (EPS) growth variability of each stock.
The weight of each stock in the index is based on a combination of its quality score & its free float market capitalisation.
DSP Nifty Midcap 150 Quality 50 Index Fund is a passive fund. The company also claims to be offering the scheme at comparatively lower expense ratio than most actively managed mid-cap funds.
“The DSP Nifty Midcap 150 Quality 50 Index Fund chooses top 50 companies ranked on the basis of three most important quality metrics. The goal is to help investors build their portfolio of mid – caps with a disciplined design to deliver outperformance over the long term,” Anil Ghelani, CFA, Head – Passive Investments& Products, DSP Investment Managers said.
“This is especially important for those looking to invest in midcap stocks. The midcap space is notorious for having many stocks that have the potential that never gets realized- our data suggests that more than 4 out 5 mid-sized companies in India never grow to become market leaders, or blue chips- which is when high returns can get unlocked,” he added.