Mid cap funds that invest in mid cap stocks have a potential to generate earnings growth at a faster rate and hence higher return in comparison to large caps and also pose a lower risk as against small cap funds. So, in case you as an investor can afford higher risk and have a higher term horizon you can consider investment in mid-cap funds via the SIP route.
Pointers to note when investing in mid-cap funds
- Since mid-cap funds put money in companies that invest in not so mature companies, you need to have an investment horizon of at least 5-years to let the company mature and maximize returns for you.
- Market volatility should not nudge you to redeem your investment i.e. volatility in such schemes cannot be ignored.
- Past short term performance cannot be just factored in for deciding on the mid cap scheme to lap up for your investment. The best option shall be to look at such schemes in longer term horizons and also make out how they performed in different market cycles. Also, another factor that needs to be monitored is risk adjusted returns.
- Also, you should be choosing a scheme that just not only has the potential to give exceptional returns in the bull run but also can contain losses in volatile times.
- When picking a mutual fund, you should go for a mid cap fund that has at least a 5-year track record and refrain from betting on NFOs providing such a scheme.
- In the long run for maximizing your return from the mid cap mutual fund scheme can be lowest expense ratio, good long term performance as well as sound and good management team.
Top 5 Mid-Cap Funds You Can Start SIP Based On CRISIL, Morning Star And Value Research Rating along with minimum SIP amount
Rating agencies based on several factors and not just NAV rate mutual funds based on their performance etc. and these ratings can certainly be a good criteria to decide on your investments in mutual funds.
We wish to tell our readers that markets have gone-up significantly in the last few months and therefore, even if you are investing through SIPs, you need to be a little cautious. Do not invest large sums, as it could be a tad risky, given where the markets are.
|Mid-cap fund||CRISIL Rating||Morning Star Rating||Value Research Rating||5 Year annualized SIP return||Minimum SIP Amount|
|PGIM India Midcap Opportunities Fund - Direct Plan - GrowthMid Cap Fund||5||5||5||33.07%||Rs. 1000|
|BNP Paribas Mid Cap Fund - Direct Plan -||5||4||3||24.28%||Rs. 300|
|Kotak Emerging Equity - Direct Plan -||4||4||4||25.33%||Rs. 1000|
|Mahindra Manulife Mid Cap Unnati Yojana - Direct Plan||4||4||4||NA||Rs. 500|
|SBI Magnum Midcap Fund - Direct Plan -||4||2||2||23.17%||Rs. 500|
Is The Timing Right To Invest In Mid Cap funds?
SIP investment does not need to be timed and the market dynamics help to average out the cost in the medium to long run. Nonetheless, markets are placed near all time high levels and there has been too fast a rally on the Nifty, which makes expert to foresee a correction on the headline indices going ahead. Now in such a situation one needs to be mindful of the inherent risk and talking specifically of the broader markets which have seen remarkable rally of late, volatility and correction is warranted. So, if you can stomach in the volatility and have a longer term horizon to maximise your returns from the investment, you can surely lap up one of the best rated mid-cap funds.
The schemes with high rating from rating agencies as well as their performance are listed just for information purpose and should not be construed as investment advice.