Majority of the mid cap funds have outperformed S&P BSE Mid Cap Index period and with impressive returns over the last year to the tune of 25.56% on Nifty Midcap index, there has been registered sustained net inflows into the mutual fund category totaling to Rs. 5558 crore during the period from March-June 2021. Furthermore, over a one-year trailing period as on August 2, 2021, the category has offered the fourth-highest returns, so if you for the long term as part of your asset allocation strategy want to lap up mid-cap funds, here are listed 5 best performing mid-cap funds that you can consider adding to your portfolio via SIP or Systematic Investment Plan route:
Best performing mid-cap funds over 10-year period
|Mid cap fund||SIP Annualised returns over 1-year (in %)||SIP Annualised returns over 3-year (in %)||SIP Annualised returns over 5-year (in %)||SIP Annualised returns over 10-year (in %)|
|L&T Midcap Fund-Growth||54.7||27.48||17.26||19.35|
|Edelweiss Mid cap fund||78.41||38.34||23.65||21.63|
|Kotak Emerging Equity-Growth||73.65||36.91||23.04||21.68|
|DSP Midcap fund||52.06||30.46||19.81||19.66|
1. L&T Midcap Fund-Growth:
Launched in the year 2004, the open ended equity scheme is pre-dominantly invested into mid-cap stocks. The fund's performance is benchmark to Nifty Midcap 100 TRI Index. The scheme is available as both direct and regular fund with annual recurring expense being 0.61% and 1.71%, respectively, as on July 31, 2021. The mid size fund has an asset size of Rs. 6725.8 crore and is categorized as a high risk fund as per the Mutual fund risk-o-meter. NAV of the fund as on August 5, 2021 is 200.86.
SIP in the fund can be planned for a minimum sum of Rs. 500 while for lump sum payment the minimum investment needed is of Rs. 5000. Rs. 10000 monthly SIP started in the fund is now worth Rs. 5.30 lakh.
Top holdings of the fund include Mphasis, Emami, Bayer CropScience, Birlasoft, Sundaram Finance etc.
Notably among the mid cap funds that have completed 10 years, L&T Midcap fund tops the chart with a 19.97% 5-year average daily rolling return over a ten-year period and has outperformed S&P BSE Mid Cap Index by 4.19%.
2. Edelweiss Mid cap fund:
This mid cap fund from the Edelweiss AMC is CRISIL 4-Star rated and has outperformed the benchmark Nifty Midcap 100 TRI over the one year period with return to the tune of 81.87%. The fund was launched in the year 2007 and since launch has yielded return of 12.16%.
The assets under management of the fund are to the tune of Rs. 1486 crore and is again a moderately high risk plan given the mid cap exposure. Last NAV of the fund was 47.74. There applies an exit load of 1% in case of redemption before a period of 1 year.
SIP in the fund can be started for Rs. 500. A monthly SIP of Rs. 10000 started 3 years hence has grown to Rs. 6.13 lakh, i.e. a substantial growth during the period.
Top stocks in the fund's portfolio include stock like Mphasis, Laurus Labs, Shriram Transport Finance, SRF, Dalmia Bharat, Gujarat Gas etc.
3. Kotak Emerging Equity-Growth:
This is comparably a large fund attracting 10.48% of the investment into the category of Rs. 14,133 crore. Expense ratio of the fund is pegged at 1.82%. Both CRISIL and Value Research have accorded the fund a 4-Star rating.
Since launch in 2007, the fund has delivered a return of 14.29% and over the last year has underperformed the benchmark by a margin, delivering 78.67% during the past one year.
SIP in the fund can be planned for a minimum sum of Rs. 1000, while for the lump sum investment you need Rs. 5000. An investment of Rs. 10000 via monthly SIP started 3 years ago is now worth Rs. 6 lakh.
Top holdings of the fund include Supreme Industries, Coromandel International, Persistent Systems, The Ramco Cements, Thermax etc.
4. DSP Midcap fund:
With a sizeable fund size to the tune of Rs. 12869 crore, the mid cap fund from the house of DSP Mutual fund is among the top performing funds over the last 10 years that has beaten the benchmark index. The fund is put under the high risk category and last NAV as on August 5, 2021 is 89.30. DSP Midcap fund carries an expense ratio of 1.83% which is lower than the category average.
63% of the corpus is invested into mid-cap stock, with remaining funds deployed in large cap and small cap stocks. Top stock holding of the fund include Balkrishna Industries, Max Financial, Supreme Industries, Atul Ltd., IPCA etc.
Over a 1-year period, the fund has delivered return of 56.11% underperforming the benchmark index.
SIP in the fund can be planned for a minimum of Rs. 500, while lump sum investment can also be made for just Rs. 500. SIP started in the fund 3 years ago has now become Rs. 5.52 lakhs.
Though the recent performance in mid cap funds has been outstanding in line with overall equities market withthe S&P BSE Mid Cap index delivering the second best returns on a year to date basis, investors can simply not be bogged down by impressive returns. They need to understand and be mindful that experts currently are advising caution when investing in such funds as the broader markets have seen a sharp rally of late.
"Macro-economic shocks over the last few years like demonetization, hastily implemented GST, IL&FS crisis & Covid-19 induced lockdowns have helped the large companies become larger and stronger, supported by scale and balance sheet strength. The smaller companies, however, have weakened and lost market share. Against this backdrop, when Covid-19 related uncertainty still lingers on, midcap valuations are close to all-time highs. We believe the markets are opting to ignore the risks associated with investing in smaller companies, but this could quickly reverse if global liquidity dries up or we encounter a Covid-19 third wave. We would advise the investor to tread with caution in the midcap & small-cap space," said Sorbh Gupta, Fund Manager- Equity, Quantum AMC.
But definitely with a longer investment horizon of more than 3-years you can add these mid-cap funds to your kitty to generate a higher return over the investment term but at the same time be prepared for any moderate losses.
Mutual fund investment is subject to risk with exposure to stock market. Investors are advised to do their own research and take professional help before making any investment decision. Investments listed and suggested here are just for information and should be construed as investment advice.