Tata Mutual Fund has launched a new offering in the equity segment—Tata Nifty Midcap 150 Index Fund—which aims to offer investors exposure to India’s growing midcap companies. The New Fund Offer (NFO) is open for subscription from 2 June to 16 June 2025. This fund is designed for those who seek better returns than largecap funds but with less volatility than smallcaps.
This open-ended equity scheme will follow the Nifty Midcap 150 TRI as its benchmark, tracking the performance of companies ranked 101 to 250 by market capitalisation within the Nifty 500 index.
Fund Highlights and Key Information for Investors
- Fund Name: Tata Nifty Midcap 150 Index Fund
- Category: Equity – Midcap Index
- Fund House: Tata Mutual Fund
- Type: Open-ended index fund
- NFO Period: 2 June – 16 June 2025
- Benchmark: Nifty Midcap 150 TRI
- Minimum Investment: ₹5,000
- Exit Load: 0.25% if redeemed within 15 days
- Risk Level: Very High (as per SEBI Riskometer)
- Lock-in Period: None
How the Midcap Index Fund Portfolio Will Look
The Nifty Midcap 150 index represents a wide range of companies from various industries. These are businesses ranked between 101 and 250 by full market capitalisation in the Nifty 500 universe. Most of these companies are considered sectoral leaders or strong emerging businesses with long-term growth potential.
This scheme will provide diversified exposure across multiple sectors such as:
- Industrials
- Financial Services
- Healthcare
- Consumer Goods
- Information Technology
This spread reduces the risk of overexposure to any single sector. Portfolio weight will favour larger midcap firms over the smaller ones, giving it a relatively stable risk-return profile. The index is rebalanced semi-annually, in March and September, to reflect updated market dynamics.
Why Midcap Funds May Offer Better Opportunities Now
Midcap companies often lie between large established firms and volatile small caps. They typically have more room for growth and innovation, while also having better financial structures than smaller businesses. This makes them a suitable choice for investors looking for higher growth than largecaps with less risk than smallcaps.
Tata Nifty Midcap 150 Index Fund is suitable for those planning for long-term wealth creation and who understand the risks involved in equity investing. It does not offer guaranteed returns, as returns depend on the performance of the index being tracked.
Dividend and Income Distribution Policy
The scheme may declare income distribution cum capital withdrawal (commonly referred to as dividends), but this will happen only if there is distributable surplus. Distribution will depend on fund manager discretion and trustee approval. Investors whose names appear on the record date will receive the payout.
No guarantee is made regarding the timing or amount of these distributions. All such payouts will be made in compliance with the rules and guidelines of SEBI and NSE.
Who Should Consider This Fund?
This fund is ideal for investors who:
- Want to diversify their equity portfolio
- Prefer passive investing based on a popular benchmark
- Seek better returns than largecap index funds
- Are comfortable with high risk
- Are looking to invest for the long term (5+ years)
Since this is a passively managed index fund, the expense ratio will likely be lower than actively managed midcap funds, making it a cost-effective choice for many investors.
Disclaimer: This article is for informational purposes only. Investing in mutual funds involves market risks. Please consult a certified financial advisor before making any investment decision.
Source: Financial Express
