Baroda BNP Paribas Mutual Fund launches new fund: NFO tracks Nifty Midcap 150 Index – Should you invest?

Baroda BNP Paribas Mutual Fund has launched the New Fund Offer (NFO) of Baroda BNP Paribas Nifty Midcap 150 Index Fund. The NFO will remain open for subscription from October 14-28, 2024.

Baroda BNP Paribas Nifty Midcap 150 Index Fund is a passively managed, low-cost equity fund which provides investors with a diversified exposure to potential high-growth midcap stocks.

Baroda BNP Paribas Nifty Midcap 150 Index Fund will offer investors a more diversified portfolio across sectors compared to the NSE Nifty 50 Index and thereby reducing the sector concentration risk.

Baroda BNP Paribas Nifty Midcap 150 Index Fund focus sectors

Baroda BNP Paribas Nifty Midcap 150 Index Fund aims to track the performance of the Nifty Midcap 150 Total Return Index, which comprises midcap companies that can become potential large caps in the future. By investing in this fund, investors may gain access to sectors such as capital goods, chemicals, real estate, and textiles, which are either under-represented or not even present in the Nifty 50 Index.

“According to the S&P Indices vs Active Report, 75% of mid/small-cap funds have underperformed their benchmarks over the last 10 years. Our NFO offers a low-cost, passive investment solution that aims to mirror the performance of the Nifty Midcap 150 Index, reducing the risk of underperformance and seeking to provide a better opportunity for growth,” says Suresh Soni, CEO, Baroda BNP Paribas Asset Management India Pvt Ltd, highlighting the significance of the NFO.

One key advantage of the Baroda BNP Paribas Nifty Midcap 150 Index Fund is the historically proven ability of its benchmark index, to deliver strong performance. An investment in the Nifty Midcap 150 TRI since April 2005 would have multiplied nearly 28 times at a CAGR of 18.7% p.a.

The fund is also a feasible option for starting Systematic Investment Plans (SIPs). A Rs 10,000 monthly SIP in the Nifty Midcap 150 TRI over the past 15 years would now be worth over Rs 1 crore, demonstrating the potential for wealth creation through regular investing.