DSP Mutual Fund launches four passive schemes: All you need to know

DSP Mutual Fund has introduced four new passive schemes that track India’s midcap and small-cap segments, expanding choices for index-based investing. “The products are intended to give investors structured access to midcap and small-cap market segments through rules-based index tracking.”—says Anil Ghelani, Head of Passive Investments & Products at DSP Mutual Fund. According to data as of October 31, 2025, the Nifty Midcap 150 TRI achieved an average 10-year rolling return of 16.2%, surpassing the Nifty 500 TRI’s 12.6%. Meanwhile, the Nifty Smallcap 250 TRI returned 13.5% in the same period.

Past index performance, the fund house cautioned, does not indicate future scheme returns. The new schemes mimic the Nifty Midcap 150 and Nifty Smallcap 250 indices, covering companies ranked 101–250 and 251–500, respectively.

The Midcap 150 index emphasises relatively stable mid-sized corporates, while the Smallcap 250 index includes capital markets, industrial products, healthcare equipment, building materials, and textiles. They do face higher drawdowns than broader benchmarks, yet extended holding periods have shown improved return probabilities. As a result, these funds may serve as complementary allocations for those seeking a broader equity strategy, combining mid-range and smaller enterprises.

DSP MF noted that the indices have low overlap with active fund portfolios, with the Midcap 150 sharing 32% common holdings with active midcap funds and the Smallcap 250 overlapping 18% with active small-cap funds. This, the fund house said, provides differentiated exposure for investors using passive strategies alongside active ones.