Mid Cap mutual funds have become increasingly prominent amongst people willing to make long-term investments for better returns. It’s also believed that Mid Cap mutual funds can significantly boost an investors wealth over a long time period. As a matter of fact, take a look at the most trending and common questions on Mid Cap mutual funds.
- What are Mid Cap mutual funds all about?
- How these funds are different from Large Cap mutual funds?
- What is the top/best Mid Cap mutual funds to invest in 2019-2020?
Also Read : Best Large Cap Mutual Funds in 2019
Nowadays, everyone in the Equity market is quite familiar with established companies like Reliance Industries, Infosys, and Tata Steel. However, there’re many other companies which are also growing at a fast pace but they aren’t well-known like the biggies. Although these companies are in their growth phase presently, but they’ll join the big league after a certain time period. Moreover, if you’re able to identify such companies and invest timely, the returns can be very high. For example, had you purchased shares of Wipro in 1980 RS.10,000, your current wealth would be worth crores. Nevertheless, those who had invested in companies such as Kingfisher Airlines would have lost all of their hard-won money.
Therefore, it’s very difficult to identify promising companies at its initial stage of growth. Except for one such firm Wipro, many other companies in the market failed, thereby causing investors to lose their funds. Presently, the best way for retail investors to identify lucrative companies is to invest in Mid Cap Funds.
Definition Of Mid Cap Mutual Funds
These funds mainly invest in Mid sized companies, which’re still in their growth phase. Neverthless, identifying such companies is a huge task, hence, it’s done by professional Fund Managers and Research Team of the Fund House. SEBI re-stated the definition of large cap, mid cap and small cap mutual funds. According to SEBI,
- Large cap is defined as the first 100 companies in terms of market capitalization.
- 100th-250th companies in terms of market capitalization are defined as mid cap companies.
- Whereas, from serial 251st onwards, the remaining companies are defined as small cap.
For more information, you can read the SEBI Circular by clicking on the given link.
Best Mid Cap Mutual Funds to Invest in 2019
Before making any investment, please check the details of the best 5 mid cap mutual funds in India in 2019. These Funds have been selected based on the long-term track record, reputation of the Fund House, quality of the Fund Management Team etc. Besides that, this list consists of direct plans only.
- L&T Mid Cap Fund
- Axis Midcap Fund
- Franklin India Prima Fund
- HDFC Midcap Opportunities
- Kotak Emerging Equity Scheme
Also Read: Best Multicap Mutual Funds to invest in 2019
L & T Midcap Direct Plan
Benchmarked at Nifty Midcap 100 TRI, this Fund’s return in the last one year was around -4.21%. The Fund follows a rigorous process to identify fundamentally strong and well-managed companies. Additionally, the Fund has shown remarkable resilience in the lean market whereas it has handsomely leaped in the rising market. Launched in the year 2004, this has assets worth Rs. 4,880 Crores. Lastly, the expense ratio of direct plan is 0.92%.
HDFC Mid Cap Opportunities Fund Direct Plan
Benchmarked at Nifty Midcap 100 TRI, the Fund’s return in the last one year was -2.45%. The funds aims to generate long-term capital from a portfolio, substantially constituted of Equity of Mid Cap companies. Having a fund size of Rs.22,825, this 12-year old plan comes with an expense ratio of 1.15%.
Axis Mid Cap Fund Direct Plan
Benchmarked at S&P BSE Mid Cap TRI, this Fund’s return in the last one year was 6.74%. This scheme aims to provide long-term capital appreciation by investing in Mid Cap companies. In fact, it usually invests at least 82% of its assets in mid cap companies. The Fund invests in companies which are likely to become large within the next one or two decades. Also, in companies that exhibit good cost control, willingness to pay out to minority shareholders and less capital intensity in business. This 8-year old fund possesses an asset size of Rs. 2,549 Crores and expense ratio of this plan is 0.9%.
Franklin India Prima Fund
Benchmarked at NIFTY Midcap 150 TRI, this Fund’s return in the last one year was 2.2%. The fund’s objective is to generate long-term capital growth from an actively managed portfolio of predominantly Equity and Equity-related instruments. It invests in medium-sized businesses with good potential for growth over the long-term. This is an old fund with an asset size of Rs. 7,148 Crores. Keeping everything else aside, the expense ratio of the direct plan is 1.08%.
Kotak Emerging Equity Scheme
Benchmarked at NIFTY Midcap 100 TRI, the Fund’s return in the last one year was 1.32%. The scheme primarily focuses on making investments in emerging business themes. This eleven-year old fund has an asset size of Rs. 4,326 Crores. Besides, the expense ratio of this plan is 0.7%, which is the lowest among all the funds mentioned above.
Top 5 Mid Cap Mutual Funds in India – Should I Invest?
Making an investment in any category of mutual funds, be it mid cap or small cap, it’s an individual decision. On this account, your choice of investing in mutual funds should be dependent on your ultimate goal and requirements. So, if your goal is less than 5 years old, you shouldn’t go for equity mutual funds at any cost. But if your investment goal is still 10 years away, you should opt for multicap funds. Whereas, if your investment goal exceeds 15-20 years, you can choose a Mid Cap mutual fund. However, the condition for the above is that you should have already invested in a multicap or index fund.
Though Mid Cap Mutual Funds offer excellent returns during bull phases, they become volatile during bear phases.
Now, that you are clear with the various aspects of mutual funds, think wisely before choosing a mid cap fund. So till then,