We evaluate the rolling returns of Nifty 50, Nifty Subsequent 50, Nifty Midcap 150 and Nifty Smallcap 250. We publish this comparability every now and then. That is the September 2025 version.
Returns for a monetary instrument that fluctuates might be calculated in two methods:
Level-to-point returns: The efficient annual compounded progress fee (CAGR) is calculated between two dates. You’ll be able to calculate CAGR to your mutual fund and evaluate it with its benchmark from Jan. 1st to Dec. 31st, or you’ll be able to calculate CAGR for the yr so far (final three hundred and sixty five days). So, the beginning and finish dates might be handy for us.
What we have to know earlier than selecting a mutual fund, or extra importantly, earlier than deciding to stop a mutual fund scheme, is how constant the fund’s efficiency is when put next with its benchmark. To do that, we have to use Rolling returns.
Calculating Rolling returns: To calculate rolling returns, we should once more determine on begin and finish dates. Allow us to say this can be a 10-month interval. We then calculate the share change within the fund’s NAV from day 1 (begin date) to day 7 (weekly return or IRR). We then calculate the weekly return from day 2 to day 8, day 3 to day 9, and so forth till we attain the final date. We repeat this train for the benchmark as nicely.
If all the dates in our NAV and index historical past are similar, we may decide what number of weeks the fund has outperformed its benchmark. If the fund has crushed its benchmark 75% of all obtainable rolling returns, it may very well be rated excessive! That is the idea of our month-to-month fairness mutual fund efficiency consistency screeners. Those that want to generate graphs like those proven under can use the mutual fund evaluation instrument that’s a part of the freefincal investor circle.
Warning: Many individuals use rolling return charts incorrectly. For instance, it is senseless to take the typical of rolling returns. A rolling returns chart primarily tells you about threat by way of the unfold of returns and cyclic efficiency. Evaluating two time collection (index vs index or index vs fund, and so on.) reveals outperformance or underperformance. See extra: Learn how to interpret rolling return charts?
Nifty 50 vs Nifty Subsequent 50
The Nifty Subsequent 50 has nearly managed to maintain its head above the Nifty 50. Infrequently, the outperformance vanishes after which will increase. If you don’t respect this and are prepared to be affected person, Nifty Subsequent 50 (or for that matter, fairness just isn’t for you!
Nifty Midcap 150 vs Nifty Subsequent 50
A lot of the current surge in mid cap indices has evaporated. We warned about this within the earlier version – Nifty vs Nifty Subsequent 50 vs Nifty Midcap 150 vs Nifty Smallcap 250: Return Comparability April 2024.
Nifty Smallcap 150 vs Nifty Subsequent 50
Once more, as warned earlier, the surge within the small cap index didn’t final.
Nifty Midcap 150 vs Nifty Smallcap 150 vs Nifty Subsequent 50
Ten-year rolling returns comparability of Nifty Subsequent 50 TRI vs Nifty Midcap 150 TRI vs Nifty Smallcap 250 TRI as of Sep 2nd 2025The small cap index doesn’t outperform the mid cap index, as we have now identified a number of occasions earlier than. Now we have additionally proven that the majority actively managed small cap indices can’t beat Nifty Midcap 150. See Energetic Mutual Funds Outperformance Consistency Report (March 2024). Readers can now maybe respect why we insist on benchmarking lively small cap funds with the midcap 150 and never the cap 250: Why are you evaluating Small Cap Mutual Funds with a Mid Cap Index?!
So, suppose I’m searching for a companion to the Nifty 50 in my portfolio (not needed IMO). In that case, I can safely get rid of all lively funds (giant, mid, small, targeted, flexicap, and so on) – see the above report for particulars. I may get rid of small cap index funds.
So, ought to I select Nifty Midcap 150 index funds or Nifty Subsequent 50 index funds? As we noticed above, the Micap index has solely lately outperformed the Nifty Subsequent 50 (which has lately recovered a bit). A lot of that has gone now.
Has Nifty Subsequent 50 change into more and more large-capish as a consequence of increased market participation? (See our earlier report: Warning! Nifty Subsequent 50 is NOT a big cap index! Does this imply the reward for holding Nifty Subsequent 50 (contemplating the chance taken) can be decrease sooner or later? Once more, nobody can say.
Maybe it’s affordable to imagine that the Nifty Subsequent 50 will likely be much less dangerous and rewarding than the Nifty Midcap 150 in future. Maybe its threat premium in comparison with the Nifty 50 might also be decrease.
Does this imply the midcap index is a more sensible choice? Not fairly. Throughout a disaster, the mid cap index can be fairly unstable with large drawdowns (fall from a most), and the way effectively fund managers may observe the index is unknown, as liquidity generally is a concern as a consequence of giant influence prices.
Due to this fact, we suggest the next:
- Buyers persist with a easy Nifty 50 or Sensex index fund. Nothing extra is required.
- If there’s a sense of FOMO, then a small publicity to Nifty Subsequent 50 is adequate. This may be irritating to carry every now and then, however that can also be true of the mid cap index. The issue with FOMOI is that, by definition, it doesn’t know when to attract the road! There isn’t any such factor as FOMO carefully!
- See Handpicked Record of Mutual Funds (PlumbLine) for our fund suggestions.
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