Nifty Midcap 150 Index Fund

A Nifty Midcap 150 Index Fund is a passive open-ended mutual fund that tracks the Nifty Midcap 150 Total Return Index, holding the 150 companies ranked 101st to 250th by full market capitalisation in their index weights, regulated under the SEBI (Mutual Funds) Regulations 1996 . It gives mid-cap exposure for a direct-plan expense ratio between 0.21 and 0.47 per cent, where an active mid-cap fund charges 1.50 to 2.00 per cent.

The index it tracks is the mid-cap block of the Indian equity market: the slice that sits below the Nifty 100 large-caps and above the Nifty Smallcap 250 . SEBI fixed this boundary in its scheme-categorisation circular of 6 October 2017, which defines a mid-cap company as the 101st to 250th by full market capitalisation. NSE Indices built the Nifty Midcap 150 on exactly that band, so the index and the regulatory definition line up.

Eight Indian asset managers run a Nifty Midcap 150 index fund, and every one of them holds the same 150 stocks in the same weights. The fund you pick cannot beat the others on stock selection, because none of them select stocks. They compete on two numbers: the total expense ratio they charge and the tracking difference they leave on the table. ICICI Prudential charges 0.21 per cent in its direct plan; SBI charges 0.47 per cent, more than double. On a Rs 10 lakh holding, that 0.26 percentage-point gap is Rs 2,600 a year, every year, for identical exposure. This article puts the funds side by side, sets out the index methodology with its NSE source, and separates the price-return index from the total-return index that the funds actually track.

Index methodology

The Nifty Midcap 150 is maintained by NSE Indices Limited, a subsidiary of the National Stock Exchange . Its base date is 1 April 2005 and its base value is 1,000; NSE launched it as a tradable product on 1 April 2016. As on 30 March 2026 its constituents represented 18.18 per cent of the free-float market capitalisation of all NSE-listed stocks, per the NSE Indices factsheet.

Constituent selection

The eligible universe is the Nifty 500 . From that universe the index takes the 150 companies ranked 101st to 250th by full market capitalisation. A stock must already be a Nifty 500 constituent, and must not be in the Nifty 100 or be otherwise excluded, to qualify. The index is computed on the free-float market-capitalisation method, so a company’s weight reflects the value of its publicly tradable shares, not its total share count.

Reconstitution

NSE Indices rebalances the index twice a year, with cut-off dates of 31 January and 31 July. The review uses six-month average data ending on the cut-off date, and the exchange gives the market four weeks of notice before any change takes effect. Buffer rules limit churn: a new security enters only when its full market capitalisation reaches 1.5 times that of the smallest current constituent, and an existing constituent leaves only when its rank falls below 275 or it drops out of the Nifty 500. The buffers keep turnover, and therefore transaction costs inside the fund, lower than a hard 101-to-250 cut-off would produce.

Sector spread

The mid-cap segment carries a wider sector spread than the large-cap Nifty 50 , which leans on financials and IT. Financial services, healthcare and pharmaceuticals, capital goods and industrials, consumer names, autos, and chemicals all carry meaningful weight in the Nifty Midcap 150, with no single sector dominating the way banking dominates the Nifty 50. For the current sector and stock weights, the NSE Indices factsheet and each fund’s monthly portfolio disclosure are the primary sources.

Compare the available Nifty Midcap 150 index funds

This is the table the rest of the article turns on. All figures are for the direct plan, which carries no distributor commission and so a lower TER than the regular plan. Total expense ratios and AUM are direct-plan figures from the funds’ published monthly disclosures; each AMC’s factsheet is the authoritative source and figures change month to month.

Two readings of the table matter. Motilal Oswal launched first, in September 2019, and runs the largest book at Rs 3,408 crore, which gives it the longest live tracking record and the deepest liquidity. ICICI Prudential is the cheapest at 0.21 per cent, undercutting Nippon India’s 0.30 per cent and Motilal Oswal’s 0.32 per cent. SBI, at 0.47 per cent, charges the most in this group for the identical basket of 150 stocks.

The per-fund tracking error is not always shown in summary comparison tables and is left to the factsheet for each scheme. It belongs in the decision, because a fund with a low headline TER but a wide tracking difference can deliver worse net returns than a slightly costlier fund that hugs the index. Read both numbers from the latest factsheet before choosing.

Two ETF routes exist alongside these index funds. The Nippon India ETF Nifty Midcap 150 listed on 25 January 2019 and is the oldest mid-cap passive vehicle on the segment; the ICICI Prudential Nifty Midcap 150 ETF and a Mirae Asset variant also trade on the exchange. An ETF needs a demat account and trades at a live price that can sit at a small premium or discount to the day’s NAV, whereas the index fund transacts at the daily NAV with no demat requirement.

How to choose a Nifty Midcap 150 index fund

Because the holdings are identical across funds, the selection collapses to four checks, in order of how much they move net returns.

First, the total expense ratio. It is the only cost that compounds against you every single year, and across this group it ranges from 0.21 per cent (ICICI Prudential) to 0.47 per cent (SBI). On a 20-year hold of Rs 10 lakh compounding at 14 per cent, the 0.26-point TER gap between those two funds works out to roughly Rs 3.5 lakh of forgone corpus, for nothing in return, because both funds own the same 150 stocks.

Second, tracking difference. This is the gap between the fund’s return and the Nifty Midcap 150 TRI’s return, and it captures the real cost of running the fund: expenses, cash drag, and the friction of rebalancing twice a year. TER sets the floor; tracking difference is what actually happened. A fund whose tracking difference runs close to its TER is doing its one job well. Pull this figure from the factsheet, which each AMC publishes monthly.

Third, AUM and fund age. A larger, older book absorbs subscriptions and redemptions without forced trading that would widen the tracking difference. Motilal Oswal at Rs 3,408 crore and Nippon India at Rs 2,188 crore are the two largest mid-cap index books; a fund under a few hundred crore is workable but has a thinner buffer.

Fourth, the fund house. The AMC sets up the systems that keep the fund in line with the index at reconstitution. A house with a long passive franchise tends to track more tightly. None of this overrides the cost-and-tracking arithmetic, but it is the tie-breaker when two funds are close.

Direct plan, not regular plan

Every figure in the comparison table is the direct plan. The same scheme also sells as a regular plan, which pays a trail commission to a distributor and folds that commission into a higher TER, typically 0.50 to 0.90 percentage points above the direct plan on a mid-cap index fund. On the Nippon India scheme, for instance, the regular plan TER runs around 0.84 per cent against the direct plan’s 0.30 per cent. That 0.54-point gap buys the investor nothing in a passive fund that follows a published index; it pays an intermediary for a fund that needs no advice to run. An investor buying directly through the AMC website or a direct platform should always hold the direct plan, because the only thing the regular plan adds is cost.

Cost arithmetic over a 20-year hold

The TER spread looks small in isolation and large over time. Take Rs 10 lakh invested for 20 years and assume the Nifty Midcap 150 TRI compounds at 14 per cent before fees, a figure in line with the segment’s long-run history though not a forecast. The fund’s net return is the index return minus its TER and a small tracking difference. Hold that constant and vary only the TER.

At a 0.21 per cent TER (ICICI Prudential’s direct plan), the net rate is about 13.79 per cent, and Rs 10 lakh grows to roughly Rs 1.31 crore. At 0.47 per cent (SBI’s direct plan), the net rate is about 13.53 per cent, and the same Rs 10 lakh grows to roughly Rs 1.26 crore. The 0.26-point TER difference, trivial in any single year, costs about Rs 5 lakh of terminal corpus over 20 years on identical holdings. Against a regular plan at 0.90 per cent, the drag is larger still. This is the whole financial argument for choosing the cheapest well-tracked index fund: the cost compounds, and the fund that costs less owns exactly the same 150 stocks as the fund that costs more.

Price return versus total return

The Nifty Midcap 150 exists in two versions, and the difference is money. The price-return (PR) index counts only the change in constituent share prices. The total-return index (TRI) does that and reinvests every dividend the constituents pay back into the index. The annual gap between the two equals the index dividend yield, which for the Nifty Midcap 150 was roughly 0.66 to 0.85 per cent in 2026 per market trackers. Compounded over a decade, a 0.7 per cent annual dividend stream is not a rounding error; it is the difference between the headline chart most sites show and the return an investor actually earns.

Every Nifty Midcap 150 index fund benchmarks against the TRI, not the PR index. The fund receives the dividends its 150 holdings pay and reinvests them, so a well-run fund’s return should track the TRI minus its expense ratio and a small tracking difference. When a fund factsheet shows the scheme trailing “the index,” check which index: trailing the TRI by 0.30 per cent on a 0.30 per cent TER is near-perfect; trailing the PR index by that margin is mediocre once you add back the dividend yield. The PR-versus-TRI distinction is why the total-return index is the only honest yardstick for a passive fund.

Risk and return profile

Mid-caps reward a long horizon and punish a short one. On the rolling-returns data NSE Indices cites, the Nifty Midcap 150 has outperformed the Nifty Smallcap 250 at every horizon from 5 to 20 years, with a mid-cap premium of roughly 240 basis points at five years widening to about 270 basis points at ten. The conventional intuition that more risk buys more return does not hold between mid and small: mid-cap companies are more institutionally owned, more liquid, and better governed, which spares them the deepest multi-year bear cycles that small-caps suffer.

The trade-off is volatility a notch above large-cap. The Nifty Midcap 150 has posted a negative one-year return in about 4 of 20 rolling years on the NSE data, against 9 of 35 for the Nifty 50 and 8 of 20 for the Nifty Smallcap 250. Drawdowns are real: in a severe correction the mid-cap index can fall 40 per cent or more from peak. An investor who cannot hold through a 40 per cent paper loss without selling should not be in a mid-cap fund. The case for mid-caps is a 10-year-plus horizon and the discipline to keep a systematic investment plan running through the drawdowns, which is when the units accumulate cheapest.

Active mid-cap funds versus the index

The mid-cap segment is where the active-versus-passive case is genuinely contested. In large-caps, most active funds trail their index after fees, which is why the passive case is strong there. In mid-caps, a meaningful number of active funds have beaten the Nifty Midcap 150 over multi-year stretches, because the segment is less efficiently priced than the large-cap top 100 and gives a research-driven manager room to add value.

The cost gap is the counterweight. An active mid-cap fund charges 1.50 to 2.00 per cent against 0.21 to 0.47 per cent for the index fund, so an active manager has to clear a hurdle of roughly 1.2 to 1.7 percentage points a year before the investor sees a single rupee of outperformance. Some clear it; the dispersion of active results is wide, and last decade’s winner is not reliably next decade’s. The passive route guarantees the index return minus a small, known cost. The active route offers a chance at more, at a higher fee and with manager risk. The choice depends on whether an investor can identify, in advance, an active fund that will beat the index net of its fee, which is harder than it sounds.

For the fuller treatment of this debate see active versus passive equity in India and the mid-cap mutual fund category page.

Role in a portfolio

Mid-caps are the growth engine of an Indian equity allocation, not its core. A common construction places the Nifty 50 or Nifty 100 at the centre, with the Nifty Midcap 150 and a smaller Nifty Smallcap 250 sleeve layered on for the higher expected return that comes with higher volatility. A conservative investor might hold 10 to 15 per cent of equity in mid-caps; an aggressive one with a long horizon, 25 to 35 per cent.

Two single-fund alternatives bundle the exposure. The Nifty LargeMidcap 250 holds the Nifty 100 and Nifty Midcap 150 at a fixed 50:50 weight, reset quarterly, giving large and mid exposure in one scheme. A multi-cap or flexi-cap fund spreads across the cap spectrum but, in the flexi-cap case, leaves the weights to the manager. The standalone Nifty Midcap 150 index fund is the right tool when the investor wants to set the mid-cap weight themselves and keep the cost at index-fund level.

Tax treatment

A Nifty Midcap 150 index fund is equity-oriented for tax, because it holds more than 65 per cent in domestic equity. Two rules apply, both reset by the Finance (No. 2) Act 2024 for transfers on or after 23 July 2024.

Long-term capital gains, on units held more than 12 months, are taxed at 12.5 per cent on the gain above a Rs 1.25 lakh annual exemption under Section 112A , with no indexation. The Rs 1.25 lakh exemption is a single allowance across all equity assets in a financial year, not a per-fund allowance. Short-term capital gains, on units held 12 months or less, are taxed at 20 per cent under Section 111A . Surcharge and cess apply on top of both rates, and the Section 87A rebate does not cover these special-rate gains.

See also

• Mutual funds in India
• Index fund in India
• How to select an index fund
• Mid-cap mutual fund
• Nifty Smallcap 250 Index Fund
• Nifty 50 Index Fund
• Nifty 50 ETF
• Nifty 100 Index Fund
• Nifty 500 Index Fund
• Nifty Next 50 Index Fund
• Nifty LargeMidcap 250 Index Fund
• Nifty Midcap 150 Total Return Index
• Nifty Smallcap 250 Total Return Index
• Multi-cap mutual fund
• Flexi-cap mutual fund
• Active versus passive equity in India
• Large-cap versus index fund
• ETF in India
• Equity ETF in India
• Tracking error in index funds
• Tracking difference in index funds
• TER regulation and slabs
• Equity mutual fund taxation
• Section 112A
• Section 111A
• Systematic investment plan
• Net asset value
• National Stock Exchange
• Motilal Oswal Mutual Fund
• Nippon India Mutual Fund
• ICICI Prudential Mutual Fund
• SBI Mutual Fund
• HDFC Mutual Fund
• Zerodha Fund House

External references

• NSE Indices: Nifty Midcap 150
• NSE Indices Nifty Midcap 150 factsheet
• SEBI
• AMFI India: categorisation of stocks
• Income Tax Department

References

1. NSE Indices Limited, “Nifty Midcap 150 Index” methodology and factsheet, data as on 30 March 2026.
2. SEBI circular SEBI/HO/IMD/DF3/CIR/P/2017/114, dated 6 October 2017, on categorisation and rationalisation of mutual fund schemes (mid cap defined as 101st to 250th company by full market capitalisation).
3. SEBI (Mutual Funds) Regulations 1996.
4. Association of Mutual Funds in India (AMFI), monthly average AUM data; and scheme factsheets and total expense ratio disclosures published by the respective AMCs, 2026.
5. Finance (No. 2) Act 2024, amending Sections 111A and 112A of the Income Tax Act 1961, effective for transfers on or after 23 July 2024.