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DSP Nifty Midcap 150 Quality ETF new fund review: Should you invest?

The scheme's benchmark index comprises the top 50 quality stocks from the Nifty midcap 150 index

December 08, 2021 / 10:47 AM IST

Passive funds are being launched by their dozens now. The latest to join the list is DSP Nifty Midcap 150 Quality 50 ETF (DQ50). Should you invest the new fund offer?

What’s on offer

DQ50 is an exchange traded fund (ETF) that would invest in mid-cap stocks. It aims to provide returns in line with those offered by the Nifty Midcap 150 Quality 50 total return index (NMQ50). The fund manager will buy the constituent stocks in the same proportion as they are in the underlying index. The index comprises the top 50 quality stocks from the Nifty midcap 150 index. The stocks are arranged on the basis of quality scores. These quality scores are arrived at by considering return on equity, financial leverage (except for financial services companies) and earning per share (EPS) growth variability of each stock analysed during the previous five financial years. The weight of each stock in the index is based on a combination of stock’s quality score and its free float market capitalization. The index is rebalanced semi-annually.

What works