DSP Mutual Fund Expands Passive Offerings With Two New Index Funds

DSP Mutual Fund has announced the launch of two new passive investment offerings, DSP Nifty 500 Index Fund and DSP Nifty Next 50 ETF, aimed at providing investors diversified, transparent, and cost-efficient access to India’s equity markets through well-established benchmark indices. The launches reinforce DSP Mutual Fund’s continued focus on expanding its passive investment platform, offering investors simple building blocks that can complement active strategies across market cycles.

The DSP Nifty 500 Index Fund is an open-ended index fund that seeks to replicate the Nifty 500 Index, which represents the top 500 listed companies in India across large-cap, mid-cap and small-cap segments. Together, these companies account for over 90% of the total listed market capitalization*, making the index one of the most comprehensive representations of India’s equity universe.

Unlike narrower large-cap indices, the Nifty 500 offers investors a structurally diversified exposure where allocations to large, mid and small caps automatically realign as markets evolve. This removes the need for frequent portfolio churn or tactical allocation decisions, allowing investors to stay invested through different phases of the economic and market cycle.

The index also provides low overlap with actively managed flexi-cap strategies, offering investors an alternative source of equity exposure that is free from fund manager-style biases and stock-selection risk. Over long periods, such broad-based exposure can help investors capture market returns with greater transparency, particularly in environments where consistent alpha generation becomes harder.

The DSP Nifty Next 50 ETF is an open-ended exchange traded fund designed to track the Nifty Next 50 Index comprising companies ranked 51 to 100 by market capitalisation within the Nifty 100 universe. Historically, this segment has served as a bridge between established large caps and emerging leaders, offering differentiated sector exposure and long-term growth potential, albeit with higher volatility.

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

The DSP Nifty 500 Index Fund (An open ended scheme replicating/ tracking Nifty 500 Index) may be suitable for investors seeking long-term capital growth through diversified exposure across market capitalisations, while the DSP Nifty Next 50 ETF (An open ended scheme replicating / tracking Nifty Next 50 Index) may be considered by investors with a longer investment horizon who are comfortable with interim volatility and are looking to complement core equity allocations.

The New Fund Offer (NFO) for both schemes opens on December 19, 2025 and closes on December 30, 2025. 

“Passive investing works best when indices are chosen for the role they play in a portfolio, not just for recent performance. The Nifty 500 provides a broad, evolving exposure to India’s equity markets, while the Nifty Next 50 offers access to large companies that are still in a phase of transition and growth. These funds are designed to act as long-term building blocks that investors can combine with active strategies based on their risk profile and investment horizon,” said Anil Ghelani, CFA – Head – Passive Investments & Products at DSP Mutual Fund.