DSP MF launches Nifty 500 Index Fund, Nifty Next 50 ETF to expand passive investing suite

DSP Mutual Fund on Thursday announced the launch of two new passive investment products—the DSP Nifty 500 Index Fund and the DSP Nifty Next 50 ETF—as part of its strategy to expand its passive offerings and give investors cost-efficient access to India’s equity markets through well-established benchmark indices.

The launches underline DSP Mutual Fund’s growing focus on passive investing as a complement to active strategies, especially for investors seeking transparency, diversification and long-term participation in India’s growth story.

The DSP Nifty 500 Index Fund is an open-ended index fund that aims to replicate the Nifty 500 Index, which tracks the top 500 listed companies across large-cap, mid-cap and small-cap segments. Collectively, these companies account for over 90% of India’s total listed market capitalisation, making the index one of the broadest representations of the domestic equity universe.

Unlike narrower indices that are concentrated in a single market-cap segment, the Nifty 500 provides built-in diversification across market capitalisations. As companies move up or down the size spectrum over time, the index automatically rebalances, allowing investors to remain aligned with market evolution without frequent portfolio changes or tactical reallocation. This structure helps investors stay invested across different economic and market cycles with minimal intervention.

The index also has relatively low overlap with actively managed flexi-cap funds, offering an alternative source of equity exposure that removes fund manager bias and stock-selection risk. Over longer periods, such broad-based exposure can help investors capture overall market returns with greater transparency, particularly when consistent alpha generation becomes challenging.

Alongside this, DSP Mutual Fund has launched the DSP Nifty Next 50 ETF, an open-ended exchange traded fund designed to track the Nifty Next 50 Index. The index comprises companies ranked between 51 and 100 by market capitalisation within the Nifty 100 universe. This segment has historically acted as a transition zone between established large caps and emerging market leaders, offering differentiated sector exposure and higher long-term growth potential, albeit with higher volatility.

Both schemes will aim to closely mirror their respective indices, subject to tracking error, supported by DSP’s dedicated passive investment desk, which follows global best practices in index replication, rebalancing and execution.

The DSP Nifty 500 Index Fund may suit investors seeking long-term capital appreciation through diversified exposure across market capitalisations, while the DSP Nifty Next 50 ETF may appeal to investors with a longer investment horizon who are comfortable with interim volatility and want to supplement core equity allocations.

The new fund offer (NFO) for both schemes opens on December 19, 2025, and closes on December 30, 2025.

Commenting on the launches, Anil Ghelani, CFA, Head – Passive Investments & Products at DSP Mutual Fund, said passive strategies work best when indices are selected based on their role in a portfolio rather than recent performance. He added that the two products are designed as long-term building blocks that investors can combine with active strategies depending on their risk profile and investment horizon.

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