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Your advantage: Invest in a mid-cap fund if you want good returns, these funds have returned up to 93% in the last 1 year.
If you want to get a good return by investing money in mutual funds, you can invest in a mid-cap equity fund. This fund category has returned up to 93% in the last 1 year. According to personal finance experts, investing in a mid-cap equity fund can give you a good return if you take the risk.
First of all find out what is a mid-cap equity fund ?
Mid-cap equity funds or mid-cap funds are mutual funds that invest primarily in stocks of mid-cap companies. According to the rules laid down by SEBI, the market capitalization is among the 101 to 250 largest companies. These funds have the right mix of risk and return as you invest in the stocks of these companies and as the market changes so does the investment.
Who should invest in it ?
Mid-cap funds carry higher risk than large-cap funds. In addition, it is worth investing in for a long time. In such a case if you want to invest for a long period for 2 to 5 years you can invest in it. Historically, midcaps have performed better than large-caps in emerging markets. It may come down as the market declines.
How much of your portfolio can be invested in it ?
According to Harshvardhan Rungta, CFP and personal finance expert at Rungta Securities, it would be appropriate to invest 20 to 30% of the portfolio in it. This means that if you have a total of Rs 100 to invest, you can invest between Rs 20 and Rs 30. It will be beneficial to invest in it for the long term.
It would be appropriate to invest through SIP
Instead of investing money in mutual funds all at once, one should invest through a systematic investment plan i.e. SIP. With SIP you can invest a fixed amount in it every month. This reduces the risk as it is not much affected by market fluctuations.
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Benefits of investing in mid cap funds ?
Companies that invest in mid-caps are more likely to grow than large-cap ones. Mid-cap stocks have less volatility than small-cap stocks.
It helps to diversify your portfolio. These mid cap funds have given excellent returns over the last several years
Fund Name Return in last 1 year (%) Average Annual Return in last 3 years (in%) Average Annual Return in last 5 years (in%)
PGIM India Midcap Opportunity Fund. Edelweiss Midcap Fund.
- Kotak Emerging Equity Fund 78.2 20.8 17.6
- ICICI Prudential Mid Cap Fund 77.6 17.2 15.4
- BNP Paribas Mid Cap 75.6 21.1 15.3
- Tata Mid Cap Growth Fund 68.8 20.7 16.5
- Invesco India Mid Cap Fund 63.8 19.8 17.5
Important Note:- This is just information you can invest money anywhere in your way. Keep in mind that this poster has no liability with loss of profit.
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