New Fund Offer: DSP MF launches DSP Multicap Fund – Should you invest?

financialexpress.com:

DSP Mutual Fund has announced the launch of DSP Multicap Fund, an open-ended scheme that offers investors the flexibility to invest across large cap, mid cap and small cap stocks, investment styles and industries. With dedicated market cap exposure to mid and small caps along with timely rebalancing, the multicap strategy offers investors better diversification and improvement in performance compared to the Nifty 500.

The New Fund Offer for DSP Multicap Fund opened for subscription on January 8th, 2024, and will close on January 22nd, 2024.

Despite investing in the same set of stocks, the multicap strategy has outperformed the Nifty 500 almost 8 out of 10 times over 5 year rolling periods between April 1, 2005 and November 30, 2023, according to the company.

The asset allocation of the scheme can be a minimum of 75% and a maximum of 100% in equity and equity-related securities of which large, mid, and small caps can account for a minimum of 25% exposure and a maximum of 50%. The scheme can also have up to 25% exposure to equity and equity related overseas securities and Debt & Money Market Instruments and up to 10% in units issued by REITs and InvITs.

Also Read: Best tax-saving investment options for FY2023-24

Currently, small & midcap stocks have outperformed large cap stocks by a wide margin and are also now more expensive on a trailing basis. This leaves the possibility for relative underperformance of the small & mid cap segment versus large caps in the near term. Historically, a fall in mid & small cap stocks has been excellent opportunities to collect more units which resulted in better returns when the market went up eventually. Hence, investors are recommended the SIP route which has shown to be a better