Junior Nifty ETF – exceptional Midcap pick

Team CrawFin/ Harshal Jawale, CFP^CM

Goldman Sachs Nifty Junior ETF (Juniorbees) is the first and lone mid cap index ETF launched in India as on date. It closely tracks the junior nifty index with nil entry/exit load for investor. Taxation treatment of it is equivalent to normal equity trading. Expense ratio being 1% for full year it tracks junior nifty index very closely allowing investor to take midcap exposure with ease.

Picking up midcap is most difficult thing for an investor. When it is easy to pick any news in any large cap company, often news reporters are not aware of issues with midcap stocks. Also not all brokers/ fund houses cover all midcaps leading it to confusion in investors mind because of lack of information. Taking exposure to few midcaps may be dangerous in such environment.

Before this ETF launch taking exposure to midcap-small cap mutual fund was one option for an investor. But here also investor has to rely on fund managers’ assessment of picking of any stock. While ETF gives exposure to top 50 midcap companies, diversification is bound to exist. Moreover index itself keep churning companies on regular basis, new good companies replace old non performers.

Junior nifty ETF can be bought on BSE/NSE using dmat account. It currently trades at little above INR 100 which is its minimum amount for investment. Flexibility in purchasing and selling, diversification into various sectors, and quality midcap companies are some of its main advantages over any other midcap offering.

Components of Junior Nifty (50) in alphabetical order –

Aditya Birla Nuvo,     Adani Enterprise,        Andhra Bank,             Ashok Leyland,

Asian paint,                Bank of Baroda,         Bank of India,            BEL,              

Bharat Forge,             Biocon,                      Bosch Ltd,                 Canara Bank,             

Colgate Palmolive,      Concor,                     Crompton Greaves,    Cummins India,         

Dabur,                        Exide Ind,                  Federal Bank,            GlaxoSmithKline,

Glenmark,                  GMR Infra,                 HDIL,                       HPCL,

IDBI,                         Idea,                          IFCI,                         Indian Hotels,

Indus Ind Bank,         IOB,                          JSW Steel,                 LIC Hsg Fin,

Lupin,                        McDowell,                 Mphasis,                    Mundra Port,

Oracle fin serv,          PFC,                          REC Ltd,                   Reliance Capital,

Shreeram transp fin,   Tata Chemical,           Tech Mahindra,          Titan,

Torrent Power,          Ultra Cement,            Union Bank,                United Phosphorous,

Yes Bank,                 Zee Ltd.

As we always advice to take 25-30% exposure to midcaps out of total equity (direct/indirect) investment, I recommend junior nifty ETF should take larger pie of it.     

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