Investors looking for higher returns from equity mutual funds often look beyond the Nifty 50 and other large-cap indices. Midcap and microcap stocks can offer higher growth potential, although this also comes with higher volatility and the possibility of sharp corrections.
I was reviewing the nifty indices website last and found this index trend page Niftyindices. This provides various index performance from 1 to 10 years time frame. Based on their historical performance and availability of mutual funds tracking these benchmarks, three indices stand out for aggressive investors — NIFTY Microcap 250, Nifty Midcap 50 and Nifty Midcap 150.
The latest index return data considered in this article is as of 27-Sep-2026.
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How We Selected These Indices
We compared broad-based Nifty indices across four investment horizons — 1 year, 3 years, 5 years and 10 years. The objective was not to identify the index with the highest return over just one period, but to find indices that have delivered strong returns over multiple periods.
We also considered whether mutual fund options are available for investors who want to obtain exposure to these indices.
The latest returns of the three selected indices are:
| Index | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|
| NIFTY Microcap 250 | 12.37% | 18.91% | 22.30% | 19.74% |
| Nifty Midcap 50 | 8.45% | 15.28% | 17.27% | 16.91% |
| Nifty Midcap 150 | 5.57% | 14.89% | 15.49% | 16.75% |
Among the three, NIFTY Microcap 250 has delivered the highest return across all four periods. Nifty Midcap 50 has also generated strong medium- and long-term returns, while Nifty Midcap 150 provides broader exposure to the midcap segment.
1) NIFTY Microcap 250
NIFTY Microcap 250 is the most aggressive index among the three. It consists of 250 companies beyond the Nifty 500 universe and is designed to track the performance of microcap stocks listed or permitted to trade on the NSE.
Its historical performance is particularly notable.
| Period | Return |
|---|---|
| 1 Year | 12.37% |
| 3 Years | 18.91% CAGR |
| 5 Years | 22.30% CAGR |
| 10 Years | 19.74% CAGR |
The index has delivered more than 18% annualized returns over both the 3-year and 10-year periods, while its 5-year annualized return is an impressive 22.30%.
However, investors should not look at these numbers in isolation. Microcap companies are generally smaller businesses and their share prices can be more volatile. Liquidity can also be lower compared with large-cap stocks, resulting in sharper price movements during periods of market stress.
Mutual fund tracking NIFTY Microcap 250
Motilal Oswal Nifty Microcap 250 Index Fund is currently an index mutual fund providing exposure to this benchmark. NSE lists Motilal Oswal Mutual Fund as the domestic index-fund issuer for NIFTY Microcap 250.
2) Nifty Midcap 50
Nifty Midcap 50 represents 50 companies from the Nifty Midcap 150 universe for which derivative contracts are available on the NSE. This makes it a more concentrated midcap index compared with the broader Nifty Midcap 150.
The latest returns are:
| Period | Return |
|---|---|
| 1 Year | 8.45% |
| 3 Years | 15.28% CAGR |
| 5 Years | 17.27% CAGR |
| 10 Years | 16.91% CAGR |
The 5-year and 10-year performance is particularly noteworthy. The index has delivered 17.27% annualized returns over five years and 16.91% over ten years.
While its returns are lower than NIFTY Microcap 250, the index represents a relatively more established segment of the market. It may therefore appeal to investors who want midcap exposure without moving as far down the market-cap spectrum as microcaps.
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Mutual funds tracking Nifty Midcap 50
NSE currently lists two domestic index-fund issuers for Nifty Midcap 50 — Axis Mutual Fund and Kotak Mahindra Mutual Fund.
Representative schemes include:
- Axis Nifty Midcap 50 Index Fund
- Kotak Nifty Midcap 50 Index Fund
These are examples of funds tracking the index and should not be considered recommendations.
3) Nifty Midcap 150
Nifty Midcap 150 provides broader exposure to the midcap segment than the Nifty Midcap 50. It covers companies ranked from 101 to 250 by full market capitalization within the Nifty 500 universe.
The latest returns are:
| Period | Return |
|---|---|
| 1 Year | 5.57% |
| 3 Years | 14.89% CAGR |
| 5 Years | 15.49% CAGR |
| 10 Years | 16.75% CAGR |
The 10-year return of 16.75% is only marginally below the Nifty Midcap 50’s 16.91%. This suggests that the broader midcap universe has also generated strong long-term wealth creation, rather than the performance being limited only to the concentrated 50-stock index.
The main difference is diversification. Nifty Midcap 150 provides exposure to a much larger number of midcap companies, while Nifty Midcap 50 is more concentrated.
Mutual funds tracking Nifty Midcap 150
There are several index mutual funds tracking Nifty Midcap 150. There are several active midcap mutual funds that are part of 15 mutual funds that generated above 18% in the last 10 years.
Some representative schemes include:
- HDFC Nifty Midcap 150 Index Fund
- ICICI Prudential Nifty Midcap 150 Index Fund
- Nippon India Nifty Midcap 150 Index Fund
- SBI Nifty Midcap 150 Index Fund
- UTI Nifty Midcap 150 Index Fund
Investors should compare expense ratios, tracking error, AUM and other fund-level factors before selecting a scheme.
How Do These 3 Indices Compare?
The latest data gives an interesting picture:
| Index | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|
| NIFTY Microcap 250 | 12.37% | 18.91% | 22.30% | 19.74% |
| Nifty Midcap 50 | 8.45% | 15.28% | 17.27% | 16.91% |
| Nifty Midcap 150 | 5.57% | 14.89% | 15.49% | 16.75% |
NIFTY Microcap 250 leads across all four periods in this comparison. Nifty Midcap 50 has delivered slightly higher returns than Nifty Midcap 150 across every period, although the difference is relatively small over the 10-year period.
The comparison also shows why investors should not select an index solely based on its latest 1-year performance. Looking at multiple periods gives a better picture of how an index has performed across different market cycles.
Why Higher Returns Come With Higher Risk
The potential for higher returns comes with higher risk. Midcap and microcap companies can experience much larger price movements than large-cap companies, particularly during market corrections.
Microcap exposure is the most aggressive of the three. Nifty Midcap 50 is more concentrated than Nifty Midcap 150, while the latter provides broader exposure across the midcap universe.
Investors should therefore be prepared for periods when these indices can fall substantially. Historical returns of 15%, 18% or 20% a year should not be interpreted as a fixed or expected annual return.
Important Note: Index Returns vs Mutual Fund Returns
The returns shown in this article are index returns and not mutual fund returns.
An index mutual fund may generate returns that are somewhat different from its underlying index because of expense ratio, tracking error, cash holdings, transaction costs and other factors.
Therefore, investors should not assume that a mutual fund tracking NIFTY Microcap 250, Nifty Midcap 50 or Nifty Midcap 150 will deliver exactly the same return as the respective index.
The mutual funds mentioned above are provided only as examples of funds that track these indices and are not mutual fund recommendations.
Who Should Consider These Indices?
These indices may be relevant for investors with a high risk appetite and a long investment horizon who understand that higher return potential comes with higher volatility.
They may be more appropriate as a part of a diversified equity portfolio rather than the entire equity allocation. Investors should also consider their existing exposure to large-cap, midcap and smallcap funds before adding another scheme based on a similar segment.
Those who may need the money in the near term or who are uncomfortable with significant market declines should carefully assess whether such high-risk equity exposure is appropriate for them.
Final Thoughts
NIFTY Microcap 250, Nifty Midcap 50 and Nifty Midcap 150 have delivered strong historical returns over different periods, with NIFTY Microcap 250 clearly standing out in the latest 1-year, 3-year, 5-year and 10-year comparison.
The Nifty Midcap 50 and Nifty Midcap 150 offer two different ways to participate in the midcap segment — one through a more concentrated 50-stock index and the other through a broader 150-stock universe.
For aggressive investors, these indices may be worth researching further. However, high historical returns should always be considered alongside volatility, valuation, investment horizon and overall portfolio allocation.
Disclaimer : This article is for educational and informational purposes only and should not be considered investment advice. The returns mentioned are historical index returns and are not indicative of future performance. Actual mutual fund returns may differ from index returns due to expenses, tracking error, taxation and other factors. Mutual fund investments are subject to market risks. Investors should consider their investment objectives, risk appetite and investment horizon before investing. Please consult a SEBI-registered investment adviser if you need personalised investment advice.
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