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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