DSP Mutual Fund launches two new index schemes

DSP Mutual Fund has launched two new index funds: the DSP Nifty IT Index Fund and the DSP Nifty Healthcare Index Fund. These funds aim to help investors gain exposure to sectors that historically show resilience during market volatility.

Both funds are designed to track their respective indices. The IT fund will invest in the top 10 IT companies by free float market cap. The healthcare fund will invest in the top 20 healthcare companies.

The New Fund Offer (NFO) period is open till June 16, 2025.

IT and healthcare are known as defensive sectors. They tend to perform better during market downturns. For example, during the 2008 global financial crisis and the 2020 COVID-19 crash, both Nifty IT and Nifty Healthcare outperformed the Nifty 500 index.

Companies in these sectors earn a large part of their revenue from global markets. Nearly 96% of revenue in the Nifty IT Index comes from outside India. For Nifty Healthcare companies, the figure is 52%. In comparison, only 25% of Nifty 50 company revenue comes from global sources.

The IT sector has shown steady earnings over the past 12 years, despite recent underperformance. DSP believes the sector is positioned for a turnaround. The healthcare sector, on the other hand, is underrepresented in India’s total market capitalization, indicating long-term growth potential.

“IT and healthcare offer a mix of growth and resilience,” said Anil Ghelani, Head of Passive Investments & Products at DSP Mutual Fund. “These sectors have lower drawdowns and offer potential for attractive returns.”

Gurjeet Kalra, Business Head – Passive Funds, added, “Defensive sectors are often underweighted in broader indices. History shows that when underweight, they tend to outperform in the next year. Our passive strategy ensures low-cost access to these sectors.”