DSP Mutual Fund adds Nifty 500 index fund and Nifty Next 50 ETF; HDFC Defence Fund allows fresh SIPs

DSP Mutual Fund on Thursday announced the launch of two new passive investment products, expanding its index-based portfolio as investor interest in low-cost, transparent strategies continues to grow. The fund house has introduced the DSP Nifty 500 Index Fund and the DSP Nifty Next 50 ETF, both designed to provide investors with simple, cost-effective access to India’s equity markets via well-known benchmark indices.

The New Fund Offer (NFO) for both schemes will open on December 19, 2025, and close on December 30, 2025. According to the asset manager, the launches underline DSP Mutual Fund’s ongoing focus on building out its passive investment platform, with products that can be used either on a standalone basis or alongside actively managed funds across different market conditions.

As per DSP Asset Managers’ press release, the DSP Nifty 500 Index Fund is an open-ended index fund that seeks to replicate the Nifty 500 Index. This index includes the top 500 listed companies in India across large-cap, mid-cap and small-cap segments. Together, these companies account for more than 90% of India’s total listed market capitalisation, making the Nifty 500 one of the broadest and most representative measures of the domestic equity market.

Unlike narrower large-cap indices, the Nifty 500 provides built-in diversification across market capitalisations. The weight of large, mid and small-cap stocks changes automatically as markets evolve, which reduces the need for investors to rebalance portfolios or make frequent tactical calls. This structure allows investors to remain invested across different economic and market cycles with relatively lower effort.

The index is also seen as having low overlap with many actively managed flexi-cap funds. According to the press release, this makes it a useful alternative source of equity exposure, free from fund manager bias and individual stock-selection risk. Over long periods, such broad-based exposure can help investors capture overall market returns with greater transparency, particularly during phases when generating consistent alpha becomes challenging.

Commenting on the launch, Anil Ghelani, CFA – Head – Passive Investments & Products at DSP Mutual Fund, said passive strategies work best when indices are selected based on the role they play in a portfolio rather than recent performance alone. He added that while the Nifty 500 offers wide and evolving exposure to India’s equity markets, the Nifty Next 50 provides access to large companies that are still in a transition and growth phase.

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

Both schemes will aim to closely track their respective indices, subject to tracking error, supported by DSP’s dedicated passive investment team that follows global best practices in index replication and rebalancing. According to the press release, the Nifty 500 Index Fund may suit investors seeking long-term capital growth through diversified exposure, while the Nifty Next 50 ETF may appeal to those with longer horizons who are comfortable with interim volatility.

Separately, in another development in the mutual fund space, HDFC Mutual Fund has announced the resumption of fresh SIP registrations in the HDFC Defence Fund under limited conditions. As per an addendum dated December 19, 2025, new SIPs will be accepted from December 23, 2025, only under a monthly frequency and capped at ₹5,000 per investor at the PAN level.