Last Updated on September 5, 2022 at 4:45 pm
In this edition of the “fund performance report”, we look at DSP Midcap Fund. Launched in Nov 2006, the fund has an AUM of about Rs. 13,300 Crores. We shall compare the reward and risk performance consistency of the fund with respect to Nifty Midcap 150 TRI and Nifty Midcap 150 Quality 50 TRI.
The Quality 50 factor-based midcap index is chosen because active mid cap funds struggle to beat it. See: Why Midcap Mutual Funds may struggle to beat this New Index from NSE! Now that we have UTI Nifty Midcap 150 Quality 50 Index Fund (link points to detailed review), active midcap fund investors must ask if it is worth continuing in such funds.
Disclaimer: Fund performance reports present return and risk analysis of a fund with representative benchmarks and not investment recommendations. It must be expressly understood that the data below reflect only past performance and is in no way an indication of future performance. Our investment recommendations can be found here: Handpicked List of Mutual Funds (PlumbLine).
Like most midcap and smallcap funds today, the fund also started out as DSP BlackRock Small and Mid Cap Fund (BlackRock has since exited) in Nov 2006 with a mandate to invest 65% of assets outside the top 100 companies by market capitalization (both mid and small cap stocks).
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.
👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈
To comply with SEBI categorization rules, the fund became DSP Midcap in March 2018. This shift is evident from its market cap allocation history since July 2017. The fund has had a balanced multicap like market cap allocation before the change in mandate. This must be kept in mind while evaluating the SIP returns below. It seems to tactically vary small and large cap exposure.
We will use three metrics to analyze performance consistency compared to the Nifty Midcap 150 TRI. Analysis such as this can be found for 350+ equity funds in our monthly mutual fund screener.
1 Rolling return outperformance consistency: the fund returns are compared with category benchmark returns over every possible 3Y,4Y, 5Y period. Higher the outperformance consistency, the better. Suppose 876 fund returns were compared with 876 benchmark returns, and the fund has beaten the benchmark 675 times. The consistency score will be 675/876 ~ 77%.
Three Years
| Metric | Nifty Midcap 150 TRI | Nifty Midcap 150 Quality 50 TRI |
| No of rolling return entries Index (3 Years) | 1537 | 1537 |
| No of rolling return entries Fund (3 years) | 1537 | 1537 |
| No of times the fund has outperformed the index (3 years) | 1100 | 661 |
| rolling return outperformance Consistency Score (3 years) | 71.57% | 43.01% |
Four Years
| Metric | Nifty Midcap 150 TRI | Nifty Midcap 150 Quality 50 TRI |
| No of rolling return entries Index (4 Years) | 1289 | 1289 |
| No of rolling return entries Fund (4 years) | 1289 | 1289 |
| No of times the fund has outperformed the index (4 years) | 911 | 342 |
| rolling return outperformance Consistency Score (4 years) | 70.67% | 26.53% |
Five years
| Metric | Nifty Midcap 150 TRI | Nifty Midcap 150 Quality 50 TRI |
| No of rolling return entries Index (5 Years) | 1043 | 1043 |
| No of rolling return entries Fund (5 years) | 1043 | 1043 |
| No of times the fund has outperformed the index (5 years) | 824 | 285 |
| rolling return outperformance Consistency Score (5 years) | 79.00% | 27.3% |
Notice the huge difference in performance between the two indices. Although the notion of a “quality mid cap stock” is arbitrary and the past performance of such an index cannot be extrapolated into the future, it is hard to digest that a set of 3-4 metrics can easily beat an actively managed mid cap fund.
2 Upside performance consistency over every possible 3Y,4Y, 5Y: Higher the better. A score of 70% means, 7 out of 10 times, the fund performed better than the category benchmark when the benchmark was moving up. This is a measure of reward. It is computed from rolling upside capture data (see link below).
| Metric | Nifty Midcap 150 TRI | Nifty Midcap 150 Quality 50 TRI |
| upside performance consistency (3 years) | 3% | 15% |
| upside performance consistency (4 years) | 0% | 16% |
| upside performance consistency (5 years) | 0% | 10% |
This is in line with the behaviour of most funds that do not exhibit consistent upside capture > 100% (higher returns than the benchmark’s positive monthly return). See for example: Strange, but true! How mutual funds beat the index!
3 Downside performance consistency over every possible 3Y,4Y, 5Y. Higher, the better. A score of 60% means, 6 out of 10 times, the fund performed better than the category benchmark when the benchmark was moving down. This is a measure of risk protection. It is computed from rolling downside capture data. Read more: An introduction to Downside and Upside Capture Ratios.
| Metric | Nifty Midcap 150 TRI | Nifty Midcap 150 Quality 50 TRI |
| downside protection consistency (3 years) | 100% | 69% |
| downside protection consistency (4 years) | 100% | 81% |
| downside protection consistency (5 years) | 100% | 92% |
DSP Midcap Fund has a reasonable downside capture consistency with respect to both indices but while this has contributed to help beat the Midcap 150 index, it has not helped as much to beat the Midcap 150 Quality 50 Index.
Trailing returns and standard deviation
Versus Nifty Midcap 150 TRI
| Metric | Benchmark | Fund |
| 1Y return | 24.7% | 13.3% |
| 2Y return | 61.2% | 42.5% |
| 3Y return | 21.2% | 17.7% |
| 4Y return | 14.9% | 12.8% |
| 5Y return | 15.3% | 12.8% |
| Metric | Benchmark | Fund |
| 1Y standard deviation | 4.4% | 4.2% |
| 2Y standard deviation | 8.9% | 8.0% |
| 3Y standard deviation | 7.8% | 6.8% |
| 4Y standard deviation | 7.1% | 6.3% |
| 5Y standard deviation | 6.6% | 5.8% |
Versus Nifty Midcap 150 Quality 50 TRI
| Metric | Benchmark | Fund |
| 1Y return | 18.93% | 13.33% |
| 2Y return | 46.85% | 42.47% |
| 3Y return | 19.06% | 17.74% |
| 4Y return | 13.51% | 12.84% |
| 5Y return | 15.81% | 12.81% |
| Metric | Benchmark | Fund |
| 1Y standard deviation | 4.37% | 4.21% |
| 2Y standard deviation | 7.63% | 7.97% |
| 3Y standard deviation | 6.71% | 6.82% |
| 4Y standard deviation | 6.11% | 6.33% |
| 5Y standard deviation | 5.69% | 5.84% |
DSP Midcap Fund has underperformed both indices over the last 1,2,3,4 and 5 years without any significant standard deviation benefit.
Unless they have supreme confidence in the fund management, the time has come for existing investors to reconsider their faith in DSP Midcap Fund. This also applies to most midcap funds since few manage to beat the Quality 50 mid cap index. UTI Nifty Midcap 150 Quality 50 Index Fund is an option but this comes with its own set of pros and cons (see article) that one must consider.
The Midcap 150 or Midcap 50 indices are not efficient choices. See: Not all index funds are the same! Beyond top 100 stocks tracking errors are huge! And Axis Nifty Midcap 50 Index fund Review. Nifty Next 50 is a reasonable passive mid cap alternative but it can be frustrating to hold. See: Is it time to exit from Nifty Next 50? Tough choices in the mid cap space!
We are on Google News
Use this button to add freefincal.com as a preferred personal finance source on Google News.
Explore 1,000+ videos on YouTube!
Subscribe to get posts via email!
Join 32,000+ readers and get free money management solutions delivered to your inbox! (Link takes you to our email sign-up form)Join our WhatsApp Channel
Explore our products
🔥Join our community of 9000+ users! 🔥 Use our Robo-advisory Tool to create a complete financial plan! More than 3,500 investors and advisors use this! Use the discount code robo25 for 20% off. Plan your retirement (early, normal, before, and after), plus non-recurring financial goals (such as child education) and recurring financial goals (such as holidays and appliance purchases). The tool helps anyone aged 18 to 80 plan for retirement, plus six non-recurring and four recurring financial goals, with a detailed cash flow summary. Our Flagship Course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market conditions! Watch the first lecture for free! One-time payment! No recurring fees! Lifelong access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence. Join the freefincal investor circle! An exclusive space for investors, advisors, fintech employees and students to access financial planning and insurance tools, mutual fund and stock analysis tools, coding strategies and Excel macros for data extraction. 750+ members are now part of our investor circle. Increase your income by getting people to pay for your skills! More than 900 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for side or passive income, we will show you how to do it by showcasing your skills and building a community that trusts and pays you. (Watch the 1st lecture for free). One-time payment! No recurring fees! Lifelong access to videos! Track your mutual funds and stock investments with our Google Sheet! We also publish monthly screeners for- Equity mutual funds
- Debt and hybrid mutual funds
- Index funds
- ETFs
- Momentum and low-volatility stock screeners
Our Podcast: Let's Get Rich With Pattu
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Audible Link: Listen to the Let's Get Rich with Pattu Podcast
You can also watch podcast episodes on the OfSpin Media Friends YouTube Channel 
Listen to the Let's Get Rich With Pattu podcast on YouTube.
Now watch Let's Get Rich With Pattu தமிழில் (in Tamil)!About The Author
Dr M Pattabiraman giving a lecture
Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice. Connect with him via Twitter(X) LinkedIn YouTube Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (Published by CNBC TV18) for DIY investors. 
This book helps you ask the right questions and find the right answers. It also includes nine online calculators to create custom solutions.
(2) Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want. 
Both the boy and girl versions of "Chinchu Gets a Superpower".
Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
Feedback from a young reader after reading Chinchu Gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from a young age. The importance of money management and decision-making based on their wants and needs. Very nicely written in simple terms. - Arun.
About freefincal & its content policy
Freefincal is a News Media organisation dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact Information: To get in touch, please use our contact form. (Sponsored posts or paid collaborations will not be entertained.)Our publications
Your Ultimate Guide to Travel
