SBI Nifty Midcap 150 Momentum 50 ETF FOF: Catch the midcap growth opportunity as market recovers

SBI Mutual Fund has launched a Fund of Fund NFO, the SBI Nifty Midcap 150 Momentum 50 ETF FOF. his scheme will invest primarily in units of the SBI Nifty Midcap 150 Momentum 50 ETF, introduced earlier this year. The underlying ETF tracks the Nifty Midcap 150 Momentum 50 Index. If you do not have demat account or prefer the convenience of mutual fund facilities such as SIP, STP or SWP, this FOF provides seamless access to momentum based midcap exposure. The NFO opened for subscription on 27^th July and will close on 5^th August 2026.

Why Midcap?

• Midcap companies sit in the sweet spot - large enough to be resilient yet small enough to scale meaningfully from their current revenue and profit base.


• Many of today’s leading large-cap corporations were once midcaps.


• Over the last two decades, the midcap segment (represented by the Nifty Midcap 150 TRI) has demonstrated significantly higher wealth creation potential than large caps (Nifty 100 TRI).


• You can see that the wealth creation potential of midcap is much higher.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st July 2026

Why factor based investment strategy works better in midcap?

• The midcap segment comprises of 150 stocks versus only 100 in large cap. Within the midcap pool, the gap between the winners and the rest is far larger than among large caps.


• Midcap stocks are relatively less researched compared to large cap stocks. As a result, price discovery is not as efficient as the large cap segment. Opportunities to create alpha through a disciplined stock selection process is higher in midcaps


• Factor investing blends the consistency of passive investing with selective characteristics of active strategies, but at a lower cost and without human subjectivity.

What is momentum investing?

Momentum is a widely used factor strategy that builds exposure to stocks demonstrating strong price trends. The premise: stocks that have been rising tend to continue rising, and those declining may remain under pressure.

A momentum strategy typically:

• Buys strength i.e., stocks that have already demonstrated positive performance.


• Cuts exposure when a downward trend is observed.

This rule based, mechanical approach helps capture sustained trends and systematically avoid underperformers.

Why momentum works in midcap segment?

• Momentum needs a large universe of possible outcomes to work well, and midcaps offer exactly that.


• Applying a momentum filter inside the midcap pool helps narrow a broad, varied universe down to companies showing consistent relative strength


• This approach combines the growth potential of midcaps with the discipline, transparency and efficiency of a quantitative factor strategy.

Nifty Midcap 150 Momentum 50 index

The index is rebalanced twice a year (June and December)

Why invest in Nifty Midcap 150 Momentum 50 index?

• Historically, data shows that the Nifty Midcap 150 Momentum 50 index has outperformed the midcap index (Nifty Midcap 150) over long investment tenures (see the chart below)
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st July 2026



• Nifty Midcap 150 Momentum 50 index gave higher calendar year returns than the midcap index in 6 out of the last 10 years.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st July 2026



• The table below shows the rolling returns distribution of Nifty Midcap 150 Momentum 50 index versus the midcap index for different investment tenures over the last 20 years. You can see that the momentum index had lesser percentage instance of negative returns and more instances of 12%+ CAGR returns compared to the midcap index. This shows that a clear rule based disciplined process can add value for investors.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st July 2026



• The charts below shows the median and minimum rolling returns of Nifty Midcap 150 Momentum 50 index versus the midcap index for different investment tenures over the last 20 years. You can see that the momentum index was able to give significantly higher median returns with similar minimum returns - superior risk / return trade-off
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st July 2026

Why invest in Nifty Midcap 150 Momentum 50 index now?

Historical data shows that steeper yield curves can create favourable environment for midcaps.

Source: Bloomberg. Data as on 30^th June 2026.

With shallower rate hike cycles (slower & lower on time & rates) alongside a phase of neutral to surplus liquidity, a phase of earnings growth catching up with valuations are conducive for the midcap segment.

Why invest in SBI Nifty Midcap 150 Momentum 50 ETF FOF?

• Current environment is suitable for midcaps if earnings growth catches up with valuations


• Momentum investing in midcap has the potential to create value for investors


• Investors do not need a demat account to invest in SBI Nifty Midcap 150 Momentum 50 ETF FOF.


• Unlike ETFs, which may trade at premiums or discounts, the FOF allows investing and redeeming at applicable NAVs.


• Investors can invest in SBI Nifty Midcap 150 Momentum 50 ETF FOF through SIP.

Who can find SBI Nifty Midcap 150 Momentum 50 ETF FOF?

• Investors looking for capital appreciation over long investment tenures through passive investing.


• Investors who want to invest in a factor index based on momentum strategy.


• Investors with very high-risk appetites.


• You should have a minimum investment tenure of 5 years.

Investors should consult with their financial advisors or mutual fund distributors if the SBI Nifty Midcap 150 Momentum 50 ETF FOF aligns with their investment needs.