Nifty midcap 150 is an index a lot of investors want to get their hands on. The companies in this index could have great unexplored potential to grow and could give your investment significant growth. But at the same time, some investors tend to stay away from such indices due to concerns related to quality. These investors might have inhibitions about the quality of some of these companies and their growth prospects. But is there any way to make use of the growth of good quality companies in the index, avoiding the rest? Let’s find out!
NIFTY midcap 150 quality 50 index
The midcap indices are an interesting area in stock markets today and Nifty’s midcap 150 quality 50 index could be the answer you are looking for here. It is an index based on the original NIFTY midcap 150 index, sorted by a quality score. The quality score is determined by the index based on several performance parameters like the return of equity, financial leverage, and earnings per share growth of a company for the past five years.
The weightage of each stock in the NIFTY midcap 150 quality 50 index is based on this quality score.
Since the quality of the midcap companies is assessed like this and added to the quality 50 index based on weightage granted by the quality score, investors can rule out their concerns about quality and leverage the growth potential of these companies. This makes a good list of stocks to buy today. Let’s examine six reasons that could prove that the midcap index is worth a shot.
Potential to grow
As said above, companies in this index are mostly yet to be explored and they could be future leading companies even. By investing in them, you can pre-book your spot to take maximum advantage of this potential growth.
Easy to invest
The index is easy to invest in as well. There are several funds and ETFs that track them and you can invest in them with just a single click.
Zero bias strategy
Nifty’s midcap 150 quality 50 index’s weightage and stock selection are completely based on the quality score. That means, there is very limited involvement from the fund manager.
Lower expense ratio
Since the fund is not actively managed, the expense ratio associated with the fund is low. A higher expense ratio could offset the profits earned and in the case of Nifty midcap 150 quality 50 index, that concern is invalid.
To buy a stock of each company in the index will cost you much more than investing in a fund or ETF that follows the index, making it much more affordable.
Although past performance need not be indicative of how the fund will perform in the future, Nifty Midcap 150 quality 50 has a good history and it underlines the growth potential the index has.
Nifty Midcap 150 Quality 50 is worth a shot, especially when investing in it is easy. But equally important is to make sure investing in this index is in line with your investment goals and risk appetite. To ensure this, you can consult a financial expert who will work with you to help you identify your investment horizon and they can even help you figure out the stocks to invest in. Happy investing!