Kotak MF launches Kotak Midcap 50 ETF

The scheme opened for subscription on Thursday and closes on January 20, 2022. Investors can invest a minimum amount of ₹5,000 during the period.

The new fund offering (NFO) is benchmarked against the Nifty Midcap 50 Index (TRI), which captures the movement of the mid-cap stocks in the market. As per their press release, since 2004, in 11 out of 18 years, the Nifty Midcap 50 Index has performed better than both Nifty 50 and Nifty 500. Quoting data from the National Stock Exchange, the AMC states that Nifty Midcap 50 has given a CAGR return of 44.9% year-to-date compared to 25.6% for Nifty 50 and 31.6% for Nifty 500.

The Kotak Midcap 50 ETF will replicate the Nifty Midcap 50 Index, which includes the top 50 companies based on full market capitalisation from Nifty Midcap 150 Index with preference given to those stocks on which derivative contracts are available on the NSE. In case 50 midcap stocks do not have derivatives contract available on them then it could have less than 50 stocks in the index.

Nilesh Shah, group president and managing director, Kotak Mahindra Asset Management Co. Ltd said, “Kotak’s Midcap 50 ETF scheme is a good choice for investors looking to complement or diversify their active fund investments through passive funds. With the economy on the mend over the past one year, many midcap firms have improved their performance during this period and are expected to deliver better returns going ahead, which would augur well for investors in the medium to long term. Further, with valuations of the underlying index having eased over the last few months following the recent bouts of correction in the broader market, this is an opportune time to invest in the Kotak Midcap 50 ETF.”