What is midcap stocks in India?
Midcap category stocks fall in between large-cap stocks and small-cap stocks.
Usually, midcap stocks have an average market capitalization of 5,000 Cr – 20,000 Cr.
The term market capitalization is computed by multiplying the number of outstanding shares in a company by the value of each share.
Market cap = No.of Outstanding shares X Value of each share.
Side note: The Market cap of a company changes over time based on the market valuation. Generally, when a company’s earnings grow year by year, it is positively reflected in the stock price. Hence the changes in the Market cap of a firm.
The base index of midcap stocks is the Nifty midcap 150 index, wherein the top 100th – 250th companies come under this index.
How many midcap companies in India?
I tried to find these data on NSE and BSE. I couldn’t come up with an accurate number.
Surprisingly, both sites showed the same results. There are 279 listed midcap companies which has a market cap between 5000Cr to 20000Cr.
Ignore, my bad marking, please!
Fun fact: Do you know how many listed companies has a market cap under 5000cr?
There are 3950+ firms which has less than 5000cr market cap.
Who should invest in midcap stocks?
There is no benchmark rule about who should invest in midcap stocks.
If a person in his late 50s is comfortable owning a midcap stocks, then he should go with his decision.
But if a person in his early 20s is more comfortable to owning large-cap stocks than owning a midcap stocks, he should stick with his conviction.
I agree midcap company stocks are more riskier and volatile compared to large cap. But one can’t ignore the reward potential too.
It’s not an advice to go and invest in midcap stocks. As an investor, you should own what you are comfortable with.
Keep a general rule in mind, all investment takes time to produce a meaningful return.
Top Midcap 150 ETF
HDFC Nifty Midcap 150 ETF:
The asset under management (AUM) of this ETF is 4Cr. Its expense ratio is 0.20% with a tracking error of 0.20 %.
Nippon India ETF Nifty Midcap 150:
The asset under management of this ETF is 664.82 Cr. Its expense ratio is 0.21% with a tracking error of 0.10%
Mirae Asset Nifty Midcap 150 ETF:
The asset under management of this ETF is 170.29 Cr. Its expense ratio is 0.05% with a tracking error of 0.07%
ICICI Prudential Midcap 150 ETF:
The AUM of this ETF is 152.51 Cr. Its expense ratio is 0.15% with a tracking error of 0.07%
What is mid-cap mutual funds?
A Midcap mutual fund focuses on investing in companies with a market capitalization in the middle range of listed stocks.
Midcap stocks tend to offer great investment returns than large-cap stocks, but with less risk and volatility than small-cap stocks.
A Midcap fund allows the investors to hold a basket of a diversified portfolio of midcap stocks.
Since the companies in the midcap funds are in a growth phase, they tend to grow at a faster pace than larger companies.
Also, companies in this fund don’t fall under the micro cap category, so less chance of bankruptcy and de-listing.
Top midcap funds by Asset size
All the funds mentioned here are actively managed funds.
Nippon India Growth Fund:
The AUM of this Fund is 13,410Cr. It’s one of the oldest funds in this category.
This fund got launched on Oct 1995. Since its launch, this fund gave a 21.43% return CAGR.
Expense ratio – 1.83% (Regular). 1.14% (Direct)
Kotak Emerging Equity Fund:
AUM of this Fund is 23,963 Cr.
This fund got launched on March 2007. Return since inception 13.34%
Expense Ratio – 1.68% (Regular), 0.49% (Direct)
Axis Midcap Fund:
AUM of this fund is 18,920 Cr. This fund got launched on Feb 2011
Return since inception 16.60%. Expense ratio – 1.86% (Regular), 0.57%( Direct)
SBI Magnum Midcap:
Aum of this Fund is 8733 Cr. Return since launch 15.90%.
This fund got launched on Mar 2005.
Expense ratio – 2.01%(Regular), 0.97%( Direct)
Mirae Asset Midcap:
AUM of this Fund is 8754 Cr. Return since launch 21.40%
This fund got launched on July 2019. Expense ratio – 1.83%(Regular), 0.61%( Direct)
HDFC Midcap Opportunities Fund:
AUM of this fund is 35010 Cr. Return since launch 15.70%
This fund got launched on Jun 2007. Expense Ratio – 1.75%(Regular), 0.95% (Direct)
ICICI Prudential Midcap Fund:
AUM of this fund is 3493 Cr. This fund got launched on Oct 2004.
Return since launch 16.13%. Expense Ratio – 2.12% (Regular), 1.17% (Direct)
TATA Midcap Growth Fund:
AUM of this fund is 1743 Cr. Fund got launched on July 1994.
Return since launch 12.73%. Expense ratio – 2.16% (Regular), 0.98% (Direct)
Franklin India Prima Fund:
AUM of this fund is 7,360 Cr. This fund got launched on Dec 1993. (Older than all the other midcap Funds)
Return since launch 18.55%. Expense ratio – 1.90% (Regular), 1.06% (Direct)
UTI Midcap Fund:
AUM of this fund is 7,098 Cr. This fund got launched on Apr 2004.
Return since launch 16.95%. Expense ratio – 1.95% (Regular), 0.99% (Direct)
Investing in either Midcap stock, Midcap mutual fund, or Midcap 150 etf can be rewarding for long term investors.
Certainly they should keep on eye on the risk they undertook to achieve such returns. If you are someone who is happy with conservative returns and less risk, they should go with advice of Warren Buffett by buying Index funds.
Thank You reading.