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Understanding Mid-Cap Mutual Funds and the Top 5 Mutual Funds to Invest In!

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05 Apr 20246 mins readBy MOFSL

A standard piece of advice that many finance gurus recommend is to invest in mutual funds. It’s a simple strategy that many of you might already be employing through a systematic investment plan. There's a prevalent belief that mutual fund investments are predominantly directed into the NIFTY 50

While this is partially true, it overlooks the diversity within mutual funds. There are many types of mutual funds like equity, debt, and arbitrage funds, each further categorised by their specific risk profiles and growth potential.

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In this blog, we will explore one such segment: mid-cap mutual funds. We'll also discuss the top 5 mid-cap funds that have promising potential for generating significant returns.

What are Mid Cap mutual funds?

Mid-cap Mutual Funds focus on investing in medium-sized Indian companies, which rank from 101 to 250th position in the stock market. These entities are currently in a developmental phase similar to where today's industry giants were several years ago.

These funds are great as they have the potential to deliver returns that outpace the broader market. However, mid-cap stocks introduce increased volatility and risk during the bull market cycle. 

Let’s look at the top 5 mutual funds you can consider investing in:

Motilal Oswal Midcap Fund

This scheme aims to secure long-term capital growth by allocating investments to quality mid-cap companies with a competitive edge.

To begin investing in this fund, a minimum initial investment of Rs 500 is required, with the option for an SIP starting at Rs 500.

Scheme Name

Inception

Date

1 Year

Return(%)

2 Year

Return(%)

3 Year

Return(%)

5 Year

Return(%)

10 Year

Return(%)

Motilal Oswal Midcap Fund-Regular Plan-Growth Option

24-02-2014

51.79

37.93

32.12

26.18

22.41


HDFC Mid Cap Opportunities Fund

The HDFC Mid Cap Opportunities Fund aims to generate long-term capital growth through investments in mid-cap companies. An initial investment requires a minimum of Rs 100 for both lump sum and SIP options. The fund's expense ratio stands at 0.77%.

Scheme Name

Inception

Date

1 Year

Return(%)

2 Year

Return(%)

3 Year

Return(%)

5 Year

Return(%)

10 Year

Return(%)

HDFC Mid-Cap Opportunities Fund-Growth Plan

05-06-2007

55.33

37.98

28.66

24.47

22.07

Quant Mid Cap Fund 

The Quant Mid Cap fund’s investment strategy is focused on surpassing the performance of diversified equity funds by investing in mid-cap stocks across different sectors.

Investors can enter the fund with a minimum initial investment of Rs 5,000 and have the option for a top-up at Rs 1,000 or more. As of 31st January 2024, the fund manages assets worth Rs 4,857.91 Crore. It imposes an exit load of 0.50% for redemptions made within three months of investment.

Scheme Name

Inception

Date

1 Year

Return(%)

2 Year

Return(%)

3 Year

Return(%)

5 Year

Return(%)

10 Year

Return(%)

Quant Mid Cap Fund 

26-02-2001

62.08

39.87

36.96

30.92

20.29

Mahindra Manulife Mid Cap Fund

The Mahindra Manulife Mid Cap Fund facilitates long-term growth by concentrating investments in a mix of equity, equity-related securities, and derivatives, mainly within mid-cap companies.

The fund mandates a minimum allocation of 65% of its total assets to equity and equity-related instruments of mid-cap firms.

You can invest in this fund for Rs 1,000. The fund imposes a 1% exit load for redemptions within the initial three months.

Scheme Name

Inception

Date

1 Year

Return(%)

2 Year

Return(%)

3 Year

Return(%)

5 Year

Return(%)

10 Year

Return(%)

Mahindra Manulife Mid Cap Fund

05-01-2018

57.81

33.23

27.08

25.04

-

ITI Mid Cap Fund

The ITI Mid Cap Fund fosters long-term capital growth through investments in mid-cap companies' equity and equity-related securities. At least 65% of its total assets are allocated to such investments.

A minimum of Rs 5,000 is needed to start investing. The minimum top-up amount is Rs 1,000. As of 31st January 2024, the fund manages assets worth Rs 680.95 Crore.

A 1% exit load is charged for redemptions within the first 12 months.

Scheme Name

Inception

Date

1 Year

Return(%)

2 Year

Return(%)

3 Year

Return(%)

5 Year

Return(%)

10 Year

Return(%)

ITI Mid Cap Fund 

05-03-2021

58.77

34.98

21.9

-

-

Conclusion 

You know that building a large corporation doesn't happen overnight. Since your investments in mid-cap mutual funds are in companies still in the growth phase, patience is key.

These companies lack the financial strength of bigger firms, which means they're more vulnerable during economic slumps and may need more time to recover. To truly benefit from your investments in mid-cap funds, a commitment of 7 to 10 years is advised.

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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