Navi Nifty Midcap 150 Index Fund: An Unbiased NFO Review

Navi Nifty Midcap 150 Index Fund is a mutual fund that invests in the Nifty Midcap 150 Index. In short,

it’s an open-ended equity scheme replicating/tracking Nifty Midcap 150 Index.

Who can invest in this Fund?

Who can avoid this Fund?

Let us explore.

Table Of Contents:

• Key Features of Navi Nifty Midcap 150 Index Fund
• Investment Objective
• Key Facts to know: Navi Nifty Midcap 150 Index Fund
• Outlook of Navi Nifty Midcap 150 Index Fund
• Pros of Investing in Navi Nifty Midcap 150 Index Fund
• Cons of Investing in Navi Nifty Midcap 150 Index Fund
• Final Takeaways of Navi Nifty Midcap 150 Index Fund

Key Features of Navi Nifty Midcap 150 Index Fund:

Investment Objective:

The investment objective of the scheme is to achieve a return equivalent to the Nifty Midcap150 Index investing in stocks of companies comprising Nifty Midcap 150 Index, subject to tracking error. 

However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. 

Key Facts to know: Navi Nifty Midcap 150 Index Fund:

• NIFTY Midcap 150 represents the next 150 companies (companies ranked 101-250) based on full market capitalization from NIFTY 500. This index intends to measure the performance of mid-market capitalization companies.

•  NIFTY Midcap 150 Index is computed using the free-float market capitalization method, wherein the level of the index reflects the total free-float market value of all the stocks in the index relative to a particular base market capitalization value.
• It has a diversified portfolio with investments in stocks from various sectors such as banking, capital goods, cement, construction and engineering, consumer durables and non-durables, energy and power, financial services and insurance, healthcare and pharmaceuticals, information technology, and telecoms.
• This product is suitable for investors who are seeking*

1.) Capital appreciation over the long term.

2.) Equity and equity-related securities are covered by Nifty Midcap 150 Index.

3.) Return that corresponds to the performance of Nifty Midcap 150 Index, subject to tracking error.

Outlook of Navi Nifty Midcap 150 Index Fund:

Portfolio Characteristics:

Sector Representation:

Top constituents by weightage:

Pros of Investing in Navi Nifty Midcap 150 Index Fund:

• As this fund is managed passively, it is expected to have a lower expense ratio than actively managed mutual fund schemes.
• This fund has a diversified portfolio with investments in stocks from various sectors.
•  This fund will be suitable for aggressive investors looking for midcap exposure. 
• This fund is free from fund manager bias.
• Long-term investments in this Index fund have got potential to give you capital appreciation.

Cons of Investing in Navi Nifty Midcap 150 Index Fund:

• As this fund invests in mid-cap companies having less stability and more volatility, it is not suitable for conservative investors.
• As an index fund, this may underperform its index due to certain factors like fees and expenses, trading costs, etc.
• The major drawback of index fund investment is tracking error, since it may not perfectly track its index.
• As an Index fund, it is not flexible when compared to active funds. This fund will not be able to take any course of corrective measures during the correction or market crash.
• This fund will not be able to deliver market-beating returns.
• Based on the market outlook, the fund cannot change the allocation dynamically
• Being an Index fund, it blindly mirrors the index. They don’t do any analysis on the underlying stocks and check the soundness of the company in which they are going to invest.
• In the active funds, the fund managers will analyze all the stocks and pick and choose the best stocks based on their research and analysis. This way active funds can take calculated risk compared to this fund.

Final Takeaways of Navi Nifty Midcap 150 Index Fund:

• If you are an aggressive investor who is not willing to invest in actively managed funds, this fund may be suitable for you.
• If you are an investor looking for large-cap or small-cap exposure as well, this fund will not be suitable for you.
• Long-term investments in actively managed portfolios can produce better returns as compared to in this fund.
• Investors expecting dynamic fund management and looking for investments that can beat the market should avoid this fund.
• We need to wait and check their expense ratio and their ability to maintain low tracking errors. There are existing similar Index Funds with less expense ratio and less tracking error.
• Investors should consult their financial planners if in doubt about whether the product is suitable for them. 

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