DSP vs JioBlackRock NFOs: Which flexi-cap strategy - passive or active - suits you?

India’s mutual fund industry is set to witness two high-profile launches in September, as DSP Mutual Fund and JioBlackRock Mutual Fund roll out contrasting approaches to the popular flexi-cap category. While DSP has introduced the country’s first flexi-cap exchange traded fund (ETF), JioBlackRock is betting on its globally tested active equity model to deliver consistent alpha.

DSP’s passive ETF approach

DSP Mutual Fund on September 25 announced the launch of the DSP Nifty 500 FlexiCap Quality 30 ETF, the first of its kind in India. Unlike traditional flexi-cap funds that rely on a manager’s discretion, this ETF will passively replicate the Nifty 500 FlexiCap Quality 30 TRI, an index of 30 quality stocks filtered from the broader Nifty 500 universe.

The fund is designed to dynamically shift between large, mid, and small caps, depending on market momentum, while anchoring itself to companies with strong fundamentals. Since its inception in 2009, the benchmark index has delivered a 17.6% CAGR, outperforming the Nifty 500 TRI and demonstrating resilience during downturns such as 2011, 2018, and the COVID-19 crash.

The NFO is open from September 25 to October 6, 2025, and aims to give investors a low-cost, transparent, and “all-weather” solution for long-term wealth creation.

JioBlackRock’s active, AI-driven play

Earlier this month, JioBlackRock Mutual Fund announced its maiden active equity product—the JioBlackRock FlexiCap Fund, which opened for subscription on September 23, 2025. Unlike DSP’s passive strategy, this scheme will be run on BlackRock’s Systematic Active Equity (SAE) platform, a machine-driven process that tracks more than 400 signals.

Around 95% of the investment process will be technology-based, minimising key-person risk and behavioural biases. The fund will target an active risk of just 3–4%, lower than industry averages, and aims to balance downside protection with consistent alpha generation.

According to JioBlackRock AMC CIO Rishi Kohli, simulations over a decade suggest the strategy can outperform benchmarks by 3–4% annually, a claim consistent with similar BlackRock-managed funds overseas.

The fund will invest across large, mid, and small-cap companies, with emphasis on disciplined portfolio construction. As the asset manager is still in its early days, it has not set any asset collection targets for the NFO.

Aspect                  | DSP Nifty 500 FlexiCap Quality 30 ETF       | JioBlackRock FlexiCap Fund
------------------------|---------------------------------------------|-------------------------------------------
Fund Type               | Passive ETF                                 | Active Mutual Fund (SAE platform)
Launch Date (NFO)       | Sept 25 – Oct 6, 2025                       | Opens Sept 23, 2025
Strategy                | Tracks Nifty 500 FlexiCap Quality 30 TRI    | Technology-driven active stock selection
Stock Selection         | 30 quality stocks from Nifty 500            | Based on 400+ signals, machine-driven
Management Style        | Rule-based, automatic allocation            | 95% tech-driven, low key-person risk
Allocation Approach     | Dynamic shifts between large, mid, small cap| Flexi-cap across market segments
Historical Benchmark    | Nifty 500 Quality 30 CAGR ~17.6% since 2009 | Simulation suggests 3–4% alpha over index
Risk Management         | Anchored to quality businesses              | Controlled active risk (3–4%)
Cost Structure          | Low-cost ETF                                | Higher cost than passive funds
Investor Profile        | Cost-conscious, prefer passive & transparent | Investors seeking active alpha with tech edge
Distribution Mode       | Listed on exchanges, can trade like stock   | Regular AMC channels, SIP/STP routes

Investment themes, rules

Though both products fall under the flexi-cap category, their strategies highlight divergent philosophies. DSP’s ETF offers simplicity, transparency, and low costs—an attractive option for investors preferring hands-off investing tied to a proven index. In contrast, JioBlackRock’s offering promises technology-led active management, with the potential to generate higher returns than passive peers, though at the cost of higher fees.

Experts note that DSP’s product may appeal to cost-conscious investors seeking market-linked returns with quality filters, while JioBlackRock is targeting investors willing to trust a quant-driven, active model with the potential to outperform but also subject to execution risks.

With both funds hitting the market within weeks of each other, investors will soon have the opportunity to choose between India’s first passive flexi-cap ETF and a globally tested active flexi-cap model—two distinctly different roads to the same goal of long-term wealth creation.