Sushil Bajaj |
📅 Last Updated on: October 31, 2025
A midcap fund is an equity mutual fund that primarily invests in mid-sized companies — usually ranked between 101st to 250th by market capitalization in India. These companies are often in the growth stage, offering a balance between the stability of large caps and the high-risk/high-return potential of small caps.
Key Features of Midcap Funds:
| Parameter | Details |
|---|---|
| Fund Name | Groww Nifty Midcap 150 Index Fund |
| Category | Others (Equity – Index) |
| Scheme Type | OPEN (New Fund Offer) |
| Launch Date | 28 Oct, 2025 |
| Benchmark | Nifty Midcap 150 TRI |
| Fund Manager | Shashi Kumar |
| Exit Load | Nil |
| Min. Investment | SIP: ₹ 500 ; Lump sum: ₹ 5,000 |
| Risk Level | Very High (Equity midcap index) |
The official objective of Groww Nifty Midcap 150 Index Fund
The investment objective of the Scheme is to generate long-term capital growth by investing in securities of the Nifty Midcap 150 Index in the same proportion/weightage with an aim to provide returns before expenses that track the total return of Nifty Midcap 150 Index, subject to tracking errors. However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved.
| Period | Approximate Return |
|---|---|
| 1-Year | ~ 4.55% (data from “Past 1 year” figure ~4.55% on 24 Oct 2025) |
| 3-Year | ~ 88.53% absolute (~ ~26.4% p.a.) as of 24 Oct 2025 |
| 5-Year | ~ 234.01% absolute (~ ~28.6% p.a.) as of 24 Oct 2025 |
The Scheme is a passively managed scheme and provides exposure to the benchmark and tracking its performance and yield as closely as possible. The Scheme invests in the stocks comprising the index regardless of their investment merit.
Here are some compelling reasons:
By tracking the Nifty Midcap 150 Index, the fund gives exposure to 150 companies in the mid-cap segment. This gives diversification across many stocks rather than picking a handful of mid-cap names.
Mid-cap companies tend to have more growth potential compared to large caps, as they are often in an expansion phase. If India’s economy grows and mid-cap earnings accelerate, this segment may benefit.
Since the strategy is passive replication, the cost (expense ratio) is expected to be lower than many active mid-cap funds. Lower cost helps in better net returns to investors in the long term.
Since it is an index fund in a mid-cap category, it suits investors who have a longer horizon (5-10 years or more) and can tolerate higher volatility for potential reward.
With index tracking, you know exactly what you’re getting—exposure to the mid-cap index—without surprises of active stock selection or style drift.
Expense Ratio: Check latest factsheet.
Exit Load: nil
Taxation:
Midcap funds (especially index ones) can face challenges. Here’s a table summarizing common pain points and how this fund or investors might mitigate them:
| Investor Pain Point | How This Fund Addresses It / Notes for Consideration |
|---|---|
| What if I pick a mid-cap fund that doesn’t perform? | By choosing an index fund that tracks the Nifty Midcap 150 Index, you avoid manager risk of poor stock selection. But you still face market/mid-cap segment risk. |
| Fees are eating into my returns | A passive index fund generally has lower cost compared to active funds. This helps improve net returns. |
| I don’t have a lot of money to start | Minimum investment is ₹ 500 with incremental ₹ 500, making it accessible for SIP investors. |
| Mid-cap funds are too volatile for me | Yes—they are higher risk. The risk is labelled “Very High” for this fund. So this fund is suitable only if you have a long horizon and can handle dips. |
| What about diversification? | The index covers 150 companies, providing broad mid-cap exposure rather than concentration in few stocks—so diversification is better than picking few mid-cap names. |
| How do I know I’m not paying hidden loads? | The NFO states Nil exit load and transparent terms. Still, investors should read the SID and KIM carefully. |
| What happens in a downturn? | Mid-cap indices can fall sharply in bear markets. The Nifty Midcap 150 Index has shown negative performance in some months (e.g., October average negative ~-0.51%). |
| Is tracking error a risk? | Yes. Since the fund will aim to replicate the index, deviations due to costs, liquidity, or turnover can cause performance drift. Investors should review post-launch tracking error disclosures. |
A: For this NFO, the exit load is stated as Nil.
A: The scheme is categorised as “Very High” risk. Because it invests in mid-cap stocks, it can be more volatile than large-cap funds.
A: Investors who: (a) want mid-cap exposure via an index strategy; (b) have a long-term horizon; (c) can tolerate higher volatility; (d) prefer a low‐cost, broad mid-cap fund.
A: Then consider large-cap index funds or diversified index funds with more stable stocks. Mid-cap index funds are inherently more volatile.
A: As this is an NFO launching in October 2025, historical returns won’t be available immediately. Once the scheme starts investing and disclosures begin, trackers such as NAV/returns will appear.
A: Tracking error is an inherent risk for index funds. Investors should monitor how closely the fund replicates the index after the scheme is operational.
In conclusion, the Groww Nifty Midcap 150 Index Fund provides a compelling opportunity for investors seeking broad, low-cost exposure to India’s mid-cap universe via an index fund. With its low minimum investment, passive strategy, and mid-cap indexing, it fits well for investors who believe in the growth potential of the mid-cap segment and who have the patience to ride out volatility.
However, it is not a guarantee of superior returns. Mid‐cap stocks carry higher risk, tracking error may erode returns, and market downturns can hit mid‐cap portfolios harder. Investors should ensure this fund aligns with their risk tolerance, investment horizon, and portfolio diversification.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Before investing, you should consult a qualified financial advisor, consider your risk tolerance, investment horizon, and review the latest scheme documents, factsheet and disclosures from Groww Mutual Fund.
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