Zerodha Fund House has introduced its fourth ETF, the Zerodha Nifty Midcap 150 ETF, targeting investors who are willing to take higher risks for higher returns. This New Fund Offer (NFO) will open for subscription on May 27, 2024. Investors can apply for this NFO with a minimum investment of ₹1000. The NFO will close on June 7, 2024. Post the allotment of units, the scheme will reopen for trading within 5 working days. Investors and traders can buy and sell the Zerodha Nifty Midcap 150 ETF during market hours just like stocks.
Zerodha Nifty Midcap 150 ETF NFO Overview
| Details | Description |
|---|---|
| NFO Opening Date | May 27, 2024 |
| NFO Closing Date | June 7, 2024 |
| Risk Level | Very High |
| Lock-in Period | None |
| Minimum Investment | ₹1000 |
| Benchmark | Mid Cap 150 (TRI) |
| Allotment NAV | ₹10 |
| Face Value | ₹10/unit |
| Minimum Purchase (on Exchange) | 1 unit |
| Creation Unit Size | 735,000 units |
| Exit Load | 0% |
| Entry Load | Not Applicable |
Zerodha Nifty Midcap 150 ETF Fund Overview
Through the Zerodha Nifty Midcap 150 ETF (Exchange Traded Fund), investors can invest in 150 mid-market cap companies in India. These companies represent various sectors of the Indian economy. By investing in the Zerodha Nifty Midcap 150 ETF, investors benefit from diversification.
Mid-cap companies, being smaller in size, have the potential for rapid growth and can become future leaders in their industries. Historical data shows that the Nifty Mid Cap 150 Index has delivered better returns compared to the large-cap index, though it also exhibits higher volatility.
The Zerodha Nifty Midcap 150 ETF could be a good option for long-term investors. Those with a long-term perspective and willingness to take higher risks on their capital should consider investing in this ETF. Mid-cap companies are defined as the 150 middle-market capitalization companies that are part of the Nifty 500 based on total market capitalization.
Midcap 150 ETF Past Performance
If an investor had invested ₹10,000 in the Nifty Midcap 150 Index on April 1, 2005, it would have grown to ₹2.45 lakh at a CAGR of 18.17%. In comparison, a fixed deposit at a CAGR of 7.12% would have grown to ₹37,343, and a savings bank account at a CAGR of 3.53% would have grown to ₹19,417 over the same period.
Moreover, if an investor had started a monthly SIP of ₹10,000 in the Nifty Midcap 150 Index on April 1, 2005, it would have grown to ₹1.74 crore at a CAGR of 18.39%. During the same period, a fixed deposit would have grown to ₹46.01 lakh at a CAGR of 6.77%, and a savings bank account would have grown to ₹32.37 lakh at a CAGR of 3.44%.
Note: Past performance is not indicative of future returns.
Taxation on Zerodha Nifty Midcap 150 ETF
If the holding period is less than one year, a 15% short-term capital gains tax will be applicable on the profit. If the holding period is more than one year, capital gains up to ₹1 lakh in a financial year will be tax-free, while gains exceeding ₹1 lakh will be taxed at 10%.
How to Apply for Zerodha Nifty Midcap 150 ETF NFO
Applications for the Zerodha Nifty Midcap 150 ETF NFO can currently be made through Coin by Zerodha and CAMS Online.
Conclusion
In conclusion, the Zerodha Nifty Midcap 150 ETF scheme presents an opportunity for investors to diversify their portfolios by tapping into midcap stocks. With its focus on mid-sized companies, the scheme offers the benefits of diversification, liquidity, and cost-efficiency. These factors make it an appealing option for those interested in investing in this segment of the market.
However, it’s crucial to note that this scheme comes with a high level of risk. Therefore, potential investors should carefully assess their risk tolerance and investment objectives before making any commitments. By doing so, they can make informed decisions aligned with their financial goals while maximizing the potential benefits of this offering.
Disclaimer: Investing in the stock market is subject to market risks. Please consult your financial advisor before making any investments.
Read Also: Zerodha Nifty 100 ETF NFO: Review, Opening Date & NAV