How can I invest in Nifty Next 100 and micro-cap companies?

livemint.com:

Is there a simple way to invest in Nifty Next 100 and Nifty Microcap 250 companies? Please suggest some ETFs (exchange traded funds) or mutual funds investing in these indexes. —V Muralidhar Naidu At present, there are prominent ETFs offered by mutual funds that invest passively in Nifty Next 50 Index, which are Nifty 100 companies after excluding the top-50 companies in terms of market capitalization (Nifty 50 companies). While you plan to invest in companies beyond the top 100 then you can consider investing in Nifty Mid Cap 150 ETFs where the investment is done in companies ranked 101-250 based in terms of market capitalization (m-cap).

This would be like completely investing in mid-sized market cap companies. There are Nifty Midcap 150 ETFs offered by Mirae Mutual Fund (MF), ICICI Prudential MF, HDFC MF and UTI MF at present. You can invest in any of these as all these funds are passively managed.

While investing in an ETF, you can look into the tracking error, which is the difference between the returns of the index and the ETF. The lower the tracking error the better the ETF. On the microcap front, there is a Motilal Oswal Nifty Mircocap 250 Index Fund, which invests in the top 250 companies beyond the Nifty 500 (top 500 companies in m-cap terms) universe.

This fund was launched in July 2023 and does not have any track record so far. Just a suggestion while you plan to invest in the above funds, you can try to diversify your investment across market caps and have some allocation in Nifty 50 Index too for large cap exposure. This will help you to create a good balance across different market caps.