- Summary
- The best mid-cap ETFs in India by net assets include Nippon India ETF Nifty Midcap 150, Mirae Asset Nifty Midcap 150 ETF and Motilal Oswal Nifty Midcap 100 ETF.
- As of the latest available data in September 2026, their net assets stood at ₹4,063 crore, ₹1,874 crore and ₹917 crore, respectively.
- Mid-cap ETFs provide diversified exposure to mid-sized companies through a single investment. Investors should compare the underlying benchmark, expense ratio, tracking performance, liquidity and portfolio composition before selecting an ETF.
Mid-cap ETFs provide exchange-traded exposure to a basket of mid-sized Indian companies. The best option depends on the index tracked, costs, tracking performance and trading liquidity rather than recent returns alone.
This guide compares mid-cap ETFs available in India and explains the factors beginners can consider before selecting one.
What Are Mid-Cap ETFs?
Mid-Cap ETFs are exchange-traded funds that invest in mid-cap stocks, typically tracking an index of mid-cap companies. For example, the Nifty Mid-cap 150 comprises 150 companies ranked 101 to 250 in the Nifty 500 by full market capitalisation.
As ETFs are listed on stock markets, investors can trade them during trading hours. With a single investment, a Mid-Cap ETF exposes the investor to many companies rather than buying individual stocks.
Best Mid-Cap ETFs in India (2026 Updated List)
The following table lists the best mid-cap ETFs ranked by net assets, using the latest available data as of September 2026.
| Rank | Mid-Cap ETF | 1-Year Return | Base Expense Ratio | Net Assets |
| 1 | Nippon India ETF Nifty Midcap 150 | 3.70% | 0.18% | ₹4,063 Cr |
| 2 | Mirae Asset Nifty Midcap 150 ETF | 3.85% | 0.05% | ₹1,874 Cr |
| 3 | Motilal Oswal Nifty Midcap 100 ETF | 4.60% | 0.20% | ₹917 Cr |
| 4 | ICICI Prudential Nifty Midcap 150 ETF | 3.82% | 0.13% | ₹791 Cr |
| 5 | LIC MF Nifty Midcap 100 ETF | 4.44% | 0.13% | ₹683 Cr |
| 6 | Zerodha Nifty Midcap 150 ETF | 4.43% | 0.18% | ₹275 Cr |
| 7 | Kotak Nifty Midcap 50 ETF | 6.75% | 0.21% | ₹214 Cr |
| 8 | HDFC NIFTY Midcap 150 ETF | 3.62% | 0.17% | ₹164 Cr |
| 9 | ICICI Prudential BSE Midcap Select ETF | 8.30% | 0.13% | ₹117 Cr |
| 10 | Kotak Nifty Midcap 150 ETF | 3.75% | 0.08% | ₹14 Cr |
Which Is the Best Mid-Cap ETF for Beginners?
There is no mid-cap ETF available in the market that would be suitable for everyone who is a beginner. A comparison of cost, benchmarks, and trading for the ETFs is required before making a selection.
- Low Expense Ratio: A low expense ratio may help reduce the costs associated with investing in the ETF. This is possible by comparing ETFs with a similar index and considering the costs associated with both. The expense ratio must not be the only criterion used to select an ETF.
- Suitable Benchmark: Investors must know which benchmark the ETF tracks before investing. Nifty Mid-cap 100 and Nifty Mid-cap 150 offer different benchmarks.
- Small Tracking Difference: There may be small differences between the ETF’s performance and its benchmark due to expense ratios and other factors. One can refer to the history of tracking differences to determine the extent of the ETF’s tracking difference.
- Good Liquidity: As ETFs are traded on stock exchanges, there must be sufficient liquidity to purchase and sell units.
Why Invest in Mid-Cap ETFs?
Mid-Cap ETFs may provide exposure to firms that have developed their businesses and may continue to grow. The following factors explain why investors may include them in an equity portfolio.
- Exposure to Mid-Cap Firms: Mid-Cap ETFs may allow investors to gain exposure to firms that fall between large-cap and small-cap firms. These firms may have already grown their businesses but may still be growing. They may offer growth prospects, which could make mid-caps significant in the equity portfolio.
- Diversification: The ETF may hold multiple companies rather than relying on a single stock. The investor may be diversifying their investments across different index firms.
- Passive Investing: Mid-Cap ETFs track an established index rather than actively selecting stocks. The objective of the ETF is to replicate the performance of the underlying index. This makes the investing strategy quite straightforward for index investors.
- Growth Potential: Mid-caps can grow their businesses, increase revenue and profit, and increase market share. It may create the scope for capital appreciation. However, growth is not guaranteed, and prices may fluctuate.
How to Choose the Best Mid-Cap ETF
Selecting a Mid-Cap ETF requires considering various features beyond its latest return. The investor needs to consider the ETF’s structure, costs, and performance relative to the benchmark.
- Benchmarking: Investors need to understand which index the ETF tracks. Various indices track different companies and have different weightings. Knowing the benchmark will help the investor understand the level of mid-cap exposure they have in this ETF.
- Expense Ratio Comparison: The expense ratio is the total expenses incurred by the fund that are charged to investors. A lower expense ratio might help the investor reduce their investment costs over time.
- Analysis of Tracking Difference: The tracking difference measures the extent to which the ETF under- or outperforms its benchmark index. If the difference is consistently lower, it means that the ETF has performed fairly close to its benchmark index. This analysis should be conducted over several periods, not just one.
- Liquidity Check: ETFs are traded on stock exchanges; hence, liquidity is important. Investors need to analyse liquidity before making an investment.
Benefits of Mid-Cap ETFs
Mid-cap ETFs offer the benefits of both index investment and exchange-traded funds.
- Portfolio Diversification: An ETF may include a few mid-cap stocks in the index. Thus, the investor can diversify their exposure by holding shares of multiple stocks in a single ETF.
- Ease of Investment Structure: There is no need for the investor to analyse and buy shares of each company present in the index. Buying one ETF share helps get exposure to the entire underlying portfolio.
- Tradeable: Mid-Cap ETFs can be purchased and sold during stock market trading hours. The investor can place orders for the ETF using their demat and trading account. The price of the ETF fluctuates with market supply and demand.
- Transparency in Strategy: An index-based ETF follows a predetermined investment strategy tied to its chosen benchmark. The investor can review the index construction and its constituent holdings to understand the overall portfolio composition.
Risks of Investing in Mid-Cap ETFs
Although Mid-Cap ETFs provide diversification, the underlying stocks may experience price fluctuations. The following risks are vital for investors to consider before investing.
- Volatility: Mid-cap stocks are more likely to exhibit higher price volatility than other stocks. Expectations about their earnings, economic situation, and market sentiment can influence their prices. This means volatility will immediately affect the price of a Mid-Cap ETF.
- Market Risk: A Mid-Cap ETF is subject to market risk due to the equity market in which it is traded. Many stocks may decline during a market correction.
- Risk of Tracking Error: Returns from the ETF may be different from the benchmark’s returns. Expenses, fees, cash balances, and other factors can cause such differences. It is important for investors to study the ETF’s past performance and tracking error.
- Risk of Illiquidity: Some ETFs may have lower liquidity. Lower liquidity may result in a higher bid-ask spread. Large-size orders may become difficult to place. Investors should study the trading volume before placing the order.
- Risk of Concentration: Although the ETF holds multiple stocks, there may be a concentration of companies or sectors within the ETF’s underlying index. Any changes in the underlying index may also affect the stock composition.
How to Invest in Mid-Cap ETFs
Buying a Mid-Cap ETF involves choosing a suitable fund and purchasing units on a stock exchange. New investors should carry out the necessary research before placing their orders.
- Opening a Demat and Trading Account: Investors typically need a demat and trading account to buy ETF units on the stock exchange. The demat account stores the ETF units electronically. Transactions can be placed using the investor’s broker website.
- Choosing the ETF: Investors should compare the benchmark, expense ratio, tracking error, liquidity, and portfolio of the available ETFs. It is also important for investors to consider whether the ETF suits their investment goals. Performance records can be analysed but not taken as an assurance.
- Compare Price and NAV: Before investing, investors can compare the ETF’s price to its NAV. The ETF can sell either above or below its NAV while the market is trading. This will give investors an idea of how far apart the market price and the actual value are.
- Enter Buy Order: Once an investor has chosen the right ETF, he can find its ticker symbol in his brokerage account. He can enter the amount he needs to invest and the type of order he wishes to place. Fees associated with trading and others must also be taken into consideration.
- Track the Investment: Investors need to regularly monitor the ETF’s performance and characteristics. Monitoring does not mean responding to every minor price change in the market.
Taxation on Mid-Cap ETFs in India
The following table shows the taxation applicable to Mid-cap ETFs as of 10 September, 2026.
| Holding Period | Tax Treatment |
| Up to 12 months | Short-term capital gains taxed at 20% |
| More than 12 months | Long-term capital gains exceeding ₹1.25 lakh in a financial year are taxed at 12.5% |
| LTCG up to ₹1.25 lakh | Exempt, subject to applicable conditions |
Conclusion
The Mid-Cap ETFs are an ideal way to obtain diversified exposure to India’s mid-cap companies through a single exchange-traded vehicle. The Mid-Cap ETFs offer a combination of both index funds and trading in units on stock exchanges.
However, before investing in mid-cap ETFs, new investors should consider the benchmark, expense ratio, tracking error, liquidity, and underlying portfolio of these ETFs. Mid-cap stocks may offer long-term growth potential; however, there are market and volatility risks involved in mid-cap investing.
FAQs
Mid-cap ETFs, being market-linked investments, are not risk-free or secure investments. This is because the prices of such ETFs tend to fluctuate, as mid-cap companies are usually more volatile than large-cap companies. New investors need to understand the risks associated with such ETFs before investing.
Returns from mid-cap ETFs are not guaranteed or predetermined, as they depend on the underlying companies and index. Mid-cap stocks are more volatile than large-cap stocks but can grow faster. The emphasis should always be on the long-term performance of Mid Cap ETFs, not on a specific annual return percentage.
Mid-cap ETFs are listed and traded on the stock exchange like equity shares. Mid-cap mutual funds are bought/redeemed through the fund house/investment portal based on the net asset value. ETFs track an index passively, while mid-cap mutual funds could be actively managed. Thus, there will be differences in cost, liquidity, and investment process between them.
There is no single market level that is universally the right entry point for a mid-cap ETF. Investors can consider their time horizon, risk tolerance and prevailing valuations rather than trying to identify a perfect short-term entry point.
Before investing in mid-cap ETFs, a beginner should open a demat/trading account and evaluate the available mid-cap ETFs. Parameters such as benchmark, expense ratio, tracking difference, liquidity, and portfolio should be considered before choosing an ETF. Units of the chosen ETF could then be bought through the stock exchange.
