Mid Cap Mutual Funds are only a viable option if you are comfortable with taking on higher risk as compared to large-cap funds. According to financial experts, this can be a good option for the long-term. Let’s read more about it and find out if it’s a good investment option for you.
Mid Cap Mutual Funds are investment funds that primarily invest in shares of mid-cap companies. Mid-cap companies are the companies that have a market capitalization ranging from Rs 5,000 crore to Rs 20,000 crore. Over the past year, the BSE Mid Cap Index has surged by over 65 percent. This has led to mid-cap equity mutual funds delivering returns of up to 71 percent during the same period.
Mid Cap Mutual Funds
Mid Cap Mutual Funds can be risky if you are just beginning with your investment journey. These are only a viable option if you are comfortable with taking on higher risk as compared to large-cap funds. Before making any decision, it is crucial to educate yourself about mutual funds. It is essential to assess your risk tolerance and investment goals.
According to financial experts, this can be a good option for the long-term. Therefore, it is recommended to invest in mid-cap funds for period of at least five years or more for more advantages.
How much to invest
Experts recommend allocating approximately 20-30 percent of your portfolio to mid-cap funds if you are comfortable with taking risks. Moreover, you must remember that you can only benefit from these funds with long-term investments.
More growth
Investing in mid-cap funds offers the advantage of greater growth potential compared to large caps. There is also reduced volatility compared to small caps. This contributes to maintaining a good investment portfolio.
Good returns
Mid-cap funds that have given good returns in recent years include Quant Cap Mid Fund, Mahindra Manulife, Motilal Oswal, HDFC Mid-Cap Opportunity Fund, and Nippon India Growth Fund.
SIPs
When investing in mutual funds, do not invest all your money at once. Instead, consider investing through a Systematic Investment Plan (SIP). This approach helps in reducing the risk as it diversifies your investments and is less impacted by market fluctuations.
Stay educated
Before making any investment decision, always seek advice from a financial expert. Educate yourself about various financial trends and then make an informed decision.
Also read: Just hit the big 30? Here are some best investment tips for you
How to invest in SIP as a beginner?
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