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What are Mid Cap Mutual Funds?

What are Mid Cap Mutual Funds?

Last Updated : July 19, 2019, 1:11 p.m.

There are three kinds of companies based on the size of market capitalization – large cap, mid cap and small companies. Large Cap companies in India are mostly companies whose market capitalization is more than INR 20,000 crores. And, mid cap companies are those whose market capitalization is more than INR 5,000 crores to INR 20,000 crores. So, Mid Cap Mutual Funds are those schemes that invest in the stocks of mid cap companies.

For whom is the Mid Cap Funds Suitable?

Stocks of mid cap companies are known to sway extremes due to high volatility, thereby implying that people with a moderate risk profile should stay away from it. It is not advisable for first time investors to invest in mid cap funds. People with high risk profile and an investment horizon of about eight to ten years can look forward to investing in mid cap funds. Experienced investors, who have done their research and can predict stock movements, can undertake investments in mid cap equity funds. On the other hand, people who are not ready to take high risk and want to be in a sweeter spot, should go for large cap funds.

What are the Benefits of Investing In Mid Cap Funds?

  • There have been several instances where investing in mid cap mutual funds have given exceptional returns, more than small cap and large cap funds.

  • Mid cap stocks are less volatile as compared to small cap stocks. This is because mid cap companies have been in business for a good number of years due to which their growth can be predicted easier than small cap companies.

  • Smart and informed investors can make the most out of mid cap funds, which wouldn’t be the case in large cap mutual funds. This is because mid cap funds are underfollowed in the market.

Recommended Mid Cap Funds to Invest In!

Fund Name 1 Year Return 3 Year Return 5 Year return
ICICI Prudential Midcap Fund -1.73% 8.21% 10.25%
Aditya Birla Sun Life Mid Cap Fund -5.94% 5.82% 10.67%
HDFC Mid Cap Opportunities Fund -5.76% 8.24% 12.40%
Axis Midcap Fund 3.10% 12.10% 12.12%
Franklin India Prima Fund -1.40% 7.73% 13.03%

N ote: All the data that has been mentioned in this article is sourced from Value Research as on July 18, 2019. Return data mentioned is in regards to Regular Plan.

Disclaimer: Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing.

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