DSP Mutual Fund launches MSCI India ETF for diversified market exposure

DSP Mutual Fund has launched the DSP MSCI India ETF, an open-ended exchange-traded fund (ETF) that seeks to replicate the performance of the MSCI India Index (Total Return Index, TRI).

The New Fund Offer (NFO) opened on November 10 and will close on November 17.

The MSCI India Index forms part of MSCI’s Global Investable Market Indexes (GIMI) framework and tracks a diversified portfolio of Indian equities across key sectors, including financials, energy, technology, and consumer services. It includes both large- and mid-cap stocks, representing a broad segment of the Indian market.

Over the past 27 years, the index has delivered an annualised return of around 14%, according to Bloomberg and MSCI data.

The ETF provides investors with a single instrument to gain diversified exposure to India’s evolving economy while reflecting long-term market trends. Unlike overseas-listed ETFs, dividends received and portfolio rebalancing within the fund are not subject to immediate taxation in India, potentially offering tax efficiency for domestic and non-resident investors.

The fund launch comes after a period of moderation in foreign institutional investment flows into Indian equities, with outflows of approximately ₹1.4 trillion since late 2021.

Analysts say a potential revival in global investor sentiment toward India could impact stocks included in the MSCI India Index.

The ETF structure also helps manage concentration risk compared with narrower benchmarks like the Nifty 50, given its diversified composition across multiple sectors and companies.

DSP Mutual Fund currently manages a range of active and passive investment products across equity, debt, and commodities. The AMC’s passive portfolio includes index funds, ETFs, and smart-beta strategies covering large-, mid-, and small-cap segments.