After we reported that Only 3 out of 28 mid cap MFs consistently beat Nifty Midcap 150, many readers wished to include a mid cap index fund in their portfolio and wanted to know how to choose one.
As regular readers may know, we have always maintained that the Nifty Next 50 is an excellent substitute for the Nifty Midcap 150. See, for example, Nippon India Nifty Midcap 150 Index Fund Review. However, the nifty next 50 index has slipped a bit over the last 18 months: Nifty Midcap 150 beats Nifty Next 50 for the first time.
We still believe that the Nifty Next 50 is all the “mid cap exposure” one needs in a portfolio. However, many readers have found this stand irritating. So for what it is worth, we would like to present some data on the available Midcap index funds.
At the time of writing, there are 11 index funds in the midcap space. The last three are factor-based indices with one Midcap 50-based index (in blue). The numbers in brackets is the AUM in crores.
- Aditya Birla SL Nifty Midcap 150 Index Fund (78.7589)
- DSP Nifty Midcap 150 Quality 50 Index Fund (145.2318)
- ICICI Pru Nifty Midcap 150 Index Fund (97.1397)
- Motilal Oswal Nifty Midcap 150 Index Fund (634.4764)
- Navi Nifty Midcap 150 Index Fund (27.5031)
- Nippon India Nifty Midcap 150 Index Fund (550.2018)
- SBI Nifty Midcap 150 Index Fund (126.9383)
- Axis Nifty Midcap 50 Index Fund (35.3939)
- Tata Nifty Midcap 150 Momentum 50 Index Fund (29.8221)
- Edelweiss Nifty Midcap150 Momentum 50 Index Fund (18.4615)
- UTI Nifty Midcap 150 Quality 50 Index Fund(G)-Direct Plan (117.7233)
Only Motilal Oswal Nifty Midcap 150 Index Fund and Nippon India Nifty Midcap 150 Index Fund have AUMs above Rs. 500 Crores. All the rest have AUMs below Rs. 150 Crores at the time of writing.
We suggest you steer clear of momentum and quality-based mid-cap index funds. See, for example, NSE Index Watch: Biggest winners and losers of 2022. We also recommend not investing in Midcap 50. See Axis Nifty Midcap 50 Index fund Review. So that leaves Mid cap 150!
There are only four funds with a history greater than one year. The rest, regardless of history, can be ignored (unless you have the confidence and conviction).
- ICICI Pru Nifty Midcap 150 Index Fund(G)-Direct Plan (0.0715) (-0.6563)
- Aditya Birla SL Nifty Midcap 150 Index Fund(G)-Direct Plan (0.0536) (-0.5689)
- Nippon India Nifty Midcap 150 Index Fund(G)-Direct Plan (0.0718) (-0.5545)
- Motilal Oswal Nifty Midcap 150 Index Fund(G)-Direct Plan (0.0753) (-0.3175)
The Motilal Oswal fund is the oldest, with a three-year history.
The first number within brackets is the last 1Y trailing tracking errors in percentage. There is little to distinguish them (One can’t take the 0.0536 too seriously. There is insufficient data).
The second number within brackets is the last 1Y tracking difference = fund return minus index return. Again can’t take the -0.3175 too seriously. So there is not much information to meaningfully distinguish the funds. So you could do an inky-pink ponky or choose the AMC you prefer. Most choices in life amount to a lead of faith (with or without data support!).
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