Best Mid Cap Mutual Funds to Invest in 2021
When it comes to mutual fund investing, mid-cap mutual funds are a popular choice for investors who seek high-growth potential while maintaining a moderate level of risk. Mid-cap mutual funds typically invest in companies with a market capitalization between $2 billion and $10 billion, which are often seen as the sweet spot between large and small-cap companies. In this blog, we will discuss the best mid-cap mutual funds to invest in 2021.
- DSP Midcap Fund
DSP Midcap Fund is a well-managed mutual fund that has consistently outperformed its benchmark index over the long term. The fund has a diversified portfolio of mid-cap stocks, with a focus on high-quality companies that have strong growth potential. As of March 2021, the fund has generated a 3-year return of 20.63%, making it one of the best mid-cap mutual funds to invest in.
- Kotak Emerging Equity Fund
Kotak Emerging Equity Fund is another top-performing mid-cap mutual fund that has a long-term track record of delivering consistent returns. The fund invests in high-growth companies across various sectors, with a focus on identifying companies that have the potential to become leaders in their respective industries. As of March 2021, the fund has generated a 3-year return of 21.76%.
- HDFC Mid-Cap Opportunities Fund
HDFC Mid-Cap Opportunities Fund is a popular mid-cap mutual fund that has a well-diversified portfolio of high-growth companies across various sectors. The fund’s investment approach is focused on identifying companies that have a sustainable competitive advantage and a strong management team. As of March 2021, the fund has generated a 3-year return of 18.21%.
- Axis Midcap Fund
Axis Midcap Fund is a top-performing mid-cap mutual fund that has consistently delivered strong returns over the long term. The fund’s investment strategy is focused on investing in high-quality mid-cap stocks with strong growth potential. As of March 2021, the fund has generated a 3-year return of 21.68%.
- Franklin India Prima Fund
Franklin India Prima Fund is a well-managed mid-cap mutual fund that has a long-term track record of delivering consistent returns. The fund has a diversified portfolio of mid-cap stocks, with a focus on companies that have a sustainable competitive advantage and a strong management team. As of March 2021, the fund has generated a 3-year return of 16.72%.
Why Invest in Mid-Cap Mutual Funds?
Investing in mid-cap mutual funds can be an excellent strategy for investors seeking higher returns than large-cap mutual funds while minimizing the risk associated with small-cap mutual funds. Mid-cap companies typically have a proven track record of success and growth potential but may not be as established as large-cap companies.
Mid-cap companies are also more likely to have a more significant growth potential than large-cap companies, which may have already reached their growth potential. Therefore, investing in mid-cap mutual funds can provide investors with an excellent opportunity to benefit from the growth potential of mid-cap companies while minimizing the risks associated with small-cap companies.
Factors to Consider While Investing in Mid-Cap Mutual Funds
When considering investing in mid-cap mutual funds, there are several factors investors should keep in mind. The following are some of the essential factors to consider:
- Investment Strategy: Investors should consider the investment strategy of the mid-cap mutual fund they want to invest in. They should choose a fund with an investment strategy that aligns with their investment goals.
- Fund Manager: The fund manager’s experience and track record are critical factors to consider when investing in mid-cap mutual funds. Investors should select a fund with an experienced and reputable fund manager.
- Expense Ratio: The expense ratio of a mutual fund is the amount charged by the fund to manage investors’ money. Investors should choose a fund with a low expense ratio to minimize the cost of investing.
- Fund Performance: Past performance is not a guarantee of future returns, but it can be an essential indicator of a fund’s success. Investors should choose a mid-cap mutual fund with a consistent and strong track record of performance.
Conclusion
Investing in mid-cap mutual funds can provide investors with an excellent opportunity to benefit from the growth potential of mid-cap companies while minimizing the risks associated with small-cap companies. However, investors should conduct thorough research and consult with a financial advisor before investing in any mutual fund. By considering factors such as investment strategy, fund manager, expense ratio, and fund performance, investors can make informed investment decisions and maximize their returns.
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Frequently Asked Questions (FAQs)
- What is a mid-cap mutual fund?
A mid-cap mutual fund is a mutual fund that invests primarily in companies with a market capitalization between $2 billion and $10 billion. These companies are generally seen as having a higher growth potential than large-cap companies but may be less risky than small-cap companies.
- What is the risk associated with investing in mid-cap mutual funds?
Mid-cap mutual funds are generally considered to be moderately risky. While mid-cap companies have a higher growth potential than large-cap companies, they may be more volatile than larger companies. Additionally, mid-cap companies may be more susceptible to economic downturns than larger, more established companies.
- What are the benefits of investing in mid-cap mutual funds?
Investing in mid-cap mutual funds can provide investors with an opportunity to benefit from the growth potential of mid-sized companies while minimizing the risks associated with small-cap companies. Mid-cap mutual funds may also provide diversification benefits and potentially higher returns than large-cap mutual funds.
- How do I choose the right mid-cap mutual fund?
When choosing a mid-cap mutual fund, consider factors such as the fund’s investment strategy, expense ratio, fund manager’s experience and track record, and fund performance. Investors should also consult with a financial advisor before making any investment decisions.
- Can I invest in mid-cap mutual funds through my 401(k) or IRA?
Yes, many 401(k) and IRA plans offer mid-cap mutual funds as investment options.
- How much should I invest in a mid-cap mutual fund?
The amount you should invest in a mid-cap mutual fund depends on your investment goals, risk tolerance, and overall investment portfolio. Investors should consult with a financial advisor to determine the appropriate allocation to mid-cap mutual funds.
- Can mid-cap mutual funds provide regular income?
While mid-cap mutual funds may not be designed to provide regular income, some funds may invest in companies that pay dividends, which can provide regular income for investors.
- What is the difference between mid-cap and small-cap mutual funds?
Mid-cap mutual funds invest primarily in companies with a market capitalization between $2 billion and $10 billion, while small-cap mutual funds invest in companies with a market capitalization below $2 billion. Small-cap companies may have a higher growth potential than mid-cap companies but may be more volatile and risky.
- Are mid-cap mutual funds suitable for all investors?
Mid-cap mutual funds may not be suitable for all investors. Investors should consider their investment goals, risk tolerance, and overall investment portfolio before investing in mid-cap mutual funds.
- Are mid-cap mutual funds tax-efficient?
Mid-cap mutual funds may be tax-efficient, as they may generate less capital gains than small-cap mutual funds. However, investors should consult with a tax professional to understand the tax implications of investing in mid-cap mutual funds.
