How DSP Mutual Fund Builds Diversified Portfolios Across Market Cycles

In a world of volatile investments and shifting economic trends, diversification is not just a buzzword but a tool that manages risk and reward. This is why DSP Mutual Fund, also known as DSP Asset Managers, has created a diversified set of opportunities that will enable its clients to invest across various market cycles while also dealing with risk effectively. From a broad offerings perspective, DSP has a diversified product range that includes equity, hybrid, debt, index funds, and multi-product offerings.

As part of this series, we will see how DSP creates diversified portfolios, some important themes in its investing strategy, and a list of its latest funds as facts. To give some background and perspective, we will also see the philosophy at Canara Robeco Mutual Fund, another well-respected Indian mutual fund.

DSP Mutual Fund: A General Portfolio Framework

DSP Mutual Fund oversees a substantial amount of assets, spread across a variety of schemes, including equity, debt, hybrid, FoFs, ETFs, and themes, with an objective to design portfolios that can sustain through economic cycles. As of late 2025, DSP Mutual Fund had a cumulative asset amount of around Rs 2,12,960 crores, spreading across 200 schemes, as per reports.

The strategic framework at DSP’s diversified portfolios includes:

1. Multi-Style Equity Allocation

DSP combines various equity strategies ranging from pure large cap stability, mid & small cap growth, to sector/thematic plays, in order to create a diversified equity core:

• Large & Broad Market exposure: DSP Large Cap Fund and DSP Nifty 50 Equal Weight Index Fund actively support the substantial equity investments.
• Growth and Opportunity Focus: Both the DSP Equity Opportunities Fund and the DSP India T.I.G.E.R Fund aim for thematic and structural growth opportunities available within the market.
• Sectors requiring specialized knowledge: The DSP Healthcare Fund provides a thematic investment option in the healthcare sector.
• Value & style tilts: DSP Value Fund, among others, provides exposure to undervalued stocks or a certain style of investing.

Equity diversification enables the DSP portfolios to harvest the benefits of different market segments without depending on the large-cap/any cap or any sector, which in turn helps them in different stages of the market cycle, like bull market, bear market, and so on.

2. Hybrid Strategies for Balanced Risk

Mixing debt and equity, the objective of Hybrid funds is to maximize equity growth while managing market instability:

The DSP Aggressive Hybrid Fund is an equity-oriented hybrid fund that offers moderate risk exposure with growth participation.

Mutual funds which are multi-assets, for instance, DSP Multi Asset Allocation Fund, further diversify investments by dynamically allocating them across equity, debt, or even other asset classes. The scheme’s approach targets reasonable returns with lower volatility through multi-asset diversification.

These hybrid models can be applied when the market environment is considered uncertain or when the investors are looking for moderate, less extreme growth.

3. Index and Passive Options

DSP has also been very actively involved in expanding its presence in passive investing. Some of these recent offerings include DSP Nifty Midcap 150 Index Fund, DSP Nifty Midcap 150 ETF, which are aiming at a broad mid-cap universe, and small cap index funds.

Passive strategies combine with active funds to provide a wide range of market exposure with low tracking errors and costs.

4. Debt and Income Stability

Equity gets the headlines, but the debt markets in the DSP universe offer stability and yield focus:

DSP provides short-term, liquid, and income-oriented mutual funds, which generate steady returns with less variability, as opposed to equity investments.

These assets are ballast in diversified investment portfolios that reduce equity risk in unpredictable market cycles.

How DSP Diversifies Across Market Cap Segments & Strategies

DSP’s portfolio of schemes is a diversified one and is more than the count of schemes because it tries to cover investment styles and market capitalization too:

Large Cap Anchors

Funds such as DSP Large Cap Fund and DSP Nifty 50 Equal Weight Index Fund offer stable exposure to established companies. They are also less volatile compared to broader markets, which are usually not affected by market corrections.

Mid & Small Cap Exposures

Though may not always figure in the main Groww top portfolio list, the DSP family includes mid-cap index funds (say, DSP Nifty Midcap 150 Index Fund), which were offered fairly recently as part of the passive index investing strategy for broader exposure in the mid-market segment. Thus, another diversification element is also taken care of.

Industry & Theme Plays

Sector-specific funds, such as health-related funds, act as satellite investments. They have the potential to outperform in particular macro-economic cycles when the overall markets are experiencing stress.

Hybrid & Multi Asset Allocation

By allocating different asset classes dynamically, the hybrid and multi-asset funds offered by DSP focus on making portfolio-related volatility smoother and less erratic. This strategy is also helpful when the equity markets are underperforming and debt(or risk-off) assets are doing better.

Comparison of DSP’s Strategy with Canara Robeco Mutual Fund

Like DSP Mutual Fund, Canara Robeco Mutual Fund provides diverse investment portfolios across various asset categories. Strategy of CRMF revolves around:

• Active stock picking with thematic strategies (e.g., consumer trends, infrastructure)
• Combinations of equity, hybrid, and debt funds to target risk profiles
• Diversification through multifaceted portfolios
• Investors can make use of calculators and other tools (SIP calculator, etc.) that will allow investors to plan according to personal goals.

Final Thoughts

It’s in the construction of a diversified investment basket that DSP Mutual Fund blends a variety of types of schemes, ranging from equity to larger and themed genres, and then further to hybrid and index funds, with the intention of riding the markets with strength and among the phases of the market cycle. With so many schemes in their portfolio, the method of DSP Mutual Fund provides investments with protection as per the risk of the investor.

When comparing it with peers such as Canara Robeco Mutual Fund, there is an overlap regarding the philosophy of diversification and growth orientation; however, the strategies of differentiation such as innovation by DSP Mutual Fund through the index approach and innovation by Canara Robeco through the thematic approach and the hybrid innovation approach provide investors choices based on their own objectives.