GENERAL23 Sept 2026
Constant rebalancing destroys the historical relevance of mid-cap indices, Kotak explains in its strategy note | Stock Market News
Kotak Institutional Equities says in a 19 September note that mid-cap indices have low utility as an investment tool. They change often and hold few stocks, so one or two sectors dominate. Only 46 stocks stayed in the Nifty Midcap 150 from FY22 through the first half of FY27. So comparing today's earnings and valuations with history tells you little.
Key Statutory Highlights
- Kotak Institutional Equities said in its 19 September strategy report that it sees low utility in using mid-cap indices as an investment tool.
- Only 46 stocks were part of the Nifty Midcap 150 consistently from FY22 to the first half of FY27, while 275 unique stocks featured over FY22-FY26.
- In the six half-year periods when the index gave positive returns, the top three sectors contributed 34% to 152% of the index's returns.
Actionable Advice for Taxpayers / Founders:If you use mid-cap index history to judge future earnings or valuations, be careful, because the index keeps changing and a few sectors can dominate it. Check the current sector weights before acting, and speak to a certified adviser before making any investment decision.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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