Are Midcaps Winning In The Long Term? Here’s What You Need To Know3 min read
Mid-cap funds are the 101st to 250th top stocks on Nifty by Market Capitalization. They are generally companies with growth potential and evolving business models that are moderate-risk equity investments. Midcaps tend to perform well for long-term horizons. For Midcaps, time in the market is more important than timing the market.
In the last 15 years, Midcaps have generated higher market returns with higher return-risk ratios while having similar volatility levels as Largecaps across multiple benchmarks. This is why more investors are looking to Midcaps for their long-term goals.
1. What is the best way to invest in Midcaps?
Midcaps over-perform in the long game with moderate risk. An average investor should look to manage the moderate risk of investing in Midcaps further. One appropriate way of investing in Midcaps is through the Nifty Midcap 150 Index, which distributes the risk across all 150 midcap stocks.
The Nifty Midcap 150 Index aims to track the performance of 150 mid-market capitalization companies.
–> To be considered for inclusion in NIFTY Midcap 150 index
Companies must form part of NIFTY 500
AND
Companies should not form part of NIFTY 100 Index
–> Securities are included if
Rank based on full market capitalization is among top 225
OR
Full market capitalization is 1.50 times of the last constituent in NIFTY Midcap 150
–> Securities are excluded if
Rank based on full market capitalization falls below 275
OR
If constituents get excluded from NIFTY 500
2. What makes the Nifty Midcap 150 index attractive for long term goals?
- The Index offers an opportunity to participate in companies that are potentially emerging blue chips of tomorrow.
- Actively managed funds are finding it difficult to outperform the Nifty Midcap 150 Index, with 95% of midcap funds underperforming the index in the last 7 years.
- Relatively low-cost option to participate in a Midcap segment of the market.
3. How has the Nifty Midcap 150 performed historically?
#1 Nifty Midcap 150 Index has outperformed both the Nifty 100 Index and Nifty 50 Index across all investment horizons.
| Period | Nifty Midcap 150 Index | Nifty 50 Index | Nifty 100 Index |
| 1 Year | 46.1% | 28.7% | 29.1% |
| 3 Year | 24.7% | 18.4% | 18.2% |
| 5 Years | 18.7% | 16.6% | 16.2% |
| 7 Years | 16.0% | 11.5% | 11.8% |
| 10 Years | 19.6% | 14.2% | 14.7% |
| 15 years | 14.3% | 11.4% | 11.9% |
| Since Inception | 17.0% | 14.9% | 15.1% |
Data as on Jan 31, 2022. National Stock Exchange (NSE),
#2 Nifty Midcap 150 Index has outperformed both the Nifty 100 Index and Nifty 50 Index in 7 out 10 calendar years
4. How can you explore Nifty Midcap 150 Index?
If you’re interested in exploring Nifty Midcap 150 Index, you can do so with the Mirae Asset Nifty Midcap 150 ETF NFO through the Paytm Money app.
This ETF offers investors an opportunity to leverage the long term growth of Midcaps while distributing risk across the category. It offers investors the opportunity to participate in companies that are potentially emerging blue chips of tomorrow and leverage returns for their long-term financial goals.
Explore the Mirae Asset Nifty Midcap 150 ETF NFO
If you want to know more about Investing in Midcap Companies then check out our Paytm Money YouTube channel.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Representations made about the performance are not indicative of future results. Paytm Money Ltd SEBI Reg No. INA100009859 Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi – 110019. The NFO offering is non Exchange traded products and Paytm Money Ltd (PML) is acting as an agent for distributing the same. Please note all disputes with respect to the distribution activity, would not have access to the Exchange investor redressal forum or Arbitration mechanism. This information is purely based on publicly available data (Data source: Mirae Asset Nifty Midcap 150 ETF NFO SID and KIM, www.moneycontrol.com, www.business-standard.com, www.livemint.com,NSE) and in no way to be considered as advice or recommendation.
