Zerodha Fund House has launched an open-ended equity index fund tracking the Nifty MidSmallcap400 50:50 Index TRI, expanding its passive investment offerings beyond large-cap stocks.
The fund has been classified as “very high” risk on the risk-o-meter, consistent with its benchmark. It is suitable for investors seeking long-term capital appreciation and willing to accept higher volatility.
As a passively managed fund, it invests in the same securities as the benchmark, aiming to mirror the index returns before expenses, subject to tracking error. The scheme is designed as a complement to large-cap exposure, offering investors diversification across a broader set of companies.
Mid- and small-cap stocks typically offer higher growth potential over the long term but are more volatile and sensitive to market fluctuations.
Also Read: Midcap and Smallcap Mutual Funds See Strong AUM Growth, But Near-Term Risks Persist
The fund seeks to replicate the performance of its underlying index, which comprises 400 stocks: 150 mid-cap and 250 small-cap companies. Stocks are selected based on free-float market capitalisation, excluding the top 100 large-cap firms. The index maintains an equal 50:50 allocation between mid- and small-cap stocks, with periodic rebalancing to retain this balance.
The TRI (Total Return Index) benchmark reflects both price movements and dividend reinvestments, providing a holistic measure of returns.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 25, 2026, 11:56 AM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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