Kotak Midcap 50 ETF scheme opens for subscription from today: 5 points that investors must know

There are some important updates for investors as Kotak Mahindra Asset Management Company Ltd (Kotak Mahindra Mutual Fund) has announced the launch of an Exchange Traded Fund - Kotak Midcap 50 ETF - an open-ended scheme that will track the Nifty Midcap 50 Index today.

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The interested investors must note that the scheme opens for subscription from today, January 6, 2022 and will continue till January 20, 2022. There are certain points that the investors must know about the scheme. They are as follows:

1) The investors can invest a minimum amount of Rs 5,000 during the new fund offering (NFO) period

2) The NFO is benchmarked against the Nifty Midcap 50 Index (TRI) which captures the movement of the mid-cap segment of the market

3) It has to be noted that since 2004, in 11 out of 18 years, the Nifty Midcap 50 Index has performed better than both Nifty 50 and Nifty 500, as per NSE. Additionally, 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.

4) 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 National Stock Exchange.

5)  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."

"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," he added.