As an investor, one must always look for a balanced portfolio that can offer returns as well as stability. Mid-cap mutual funds are a good choice for investors who are willing to take moderate risks for potentially higher returns. In this blog, we will discuss some of the best mid-cap mutual funds to invest in 2022.
What are mid-cap mutual funds?
Mid-cap mutual funds are those that invest in companies with a market capitalization between Rs. 5,000 crore and Rs. 20,000 crore. These companies are usually in the growth stage and have the potential to grow and become large-cap companies in the future. As mid-cap companies are less established and less known, they offer higher potential returns than large-cap companies.
Here are some of the best mid-cap mutual funds to invest in 2022:
HDFC Mid-Cap Opportunities Fund
HDFC Mid-Cap Opportunities Fund is one of the most popular mid-cap mutual funds in India. The fund has a proven track record of delivering consistent returns over the years. The fund invests in mid-cap companies that have strong fundamentals and are expected to grow in the future.
Axis Midcap Fund
Axis Midcap Fund is another popular mid-cap mutual fund in India. The fund invests in mid-cap companies that have the potential to grow and become large-cap companies in the future. The fund has a diversified portfolio and invests in companies across various sectors.
ICICI Prudential Midcap Fund
ICICI Prudential Midcap Fund is a well-diversified mid-cap mutual fund that invests in companies with strong fundamentals and growth potential. The fund has a proven track record of delivering consistent returns over the years.
SBI Magnum Midcap Fund
SBI Magnum Midcap Fund is a high-risk, high-reward mid-cap mutual fund that invests in mid-cap companies with strong fundamentals and growth potential. The fund has a well-diversified portfolio and invests across various sectors.
Kotak Emerging Equity Fund
Kotak Emerging Equity Fund is a well-diversified mid-cap mutual fund that invests in companies with strong fundamentals and growth potential. The fund has a proven track record of delivering consistent returns over the years.
Franklin India Prima Fund
Franklin India Prima Fund is a mid-cap mutual fund that invests in mid-cap companies with strong fundamentals and growth potential. The fund has a well-diversified portfolio and invests across various sectors.
DSP Midcap Fund
DSP Midcap Fund is a well-diversified mid-cap mutual fund that invests in companies with strong fundamentals and growth potential. The fund has a proven track record of delivering consistent returns over the years.
Why invest in mid-cap mutual funds?
Potential for higher returns: Mid-cap companies are relatively smaller and have higher growth potential than large-cap companies. Investing in mid-cap mutual funds can offer potentially higher returns over the long term.
Diversification: Mid-cap mutual funds invest in a diversified portfolio of mid-cap companies across various sectors. This offers a good diversification and reduces the risk of investing in a single stock or sector.
Less crowded: Mid-cap stocks are less followed by analysts and institutional investors, which means there is less competition to buy them. This can create opportunities for savvy investors to find undervalued gems.
Exposure to emerging sectors: Mid-cap companies are usually in the growth stage and operate in emerging sectors, which can offer exposure to exciting new industries like e-commerce, fintech, and healthcare.
Factors to consider before investing in mid-cap mutual funds
Risk tolerance: Mid-cap mutual funds are high-risk investments and are suitable for investors with a moderate to high-risk tolerance.
Investment horizon: Investing in mid-cap mutual funds requires a long-term investment horizon of at least 5-7 years to achieve potentially higher returns.
Fund manager track record: It is important to check the track record of the fund manager and the fund’s performance over the years before investing.
Expense ratio: Mid-cap mutual funds have higher expense ratios than large-cap mutual funds. It is important to consider the expense ratio and the impact it can have on returns.
Final thoughts
Mid-cap mutual funds can offer a good balance between risk and returns for investors who are willing to take moderate risks. However, it is important to do your own research, assess your risk tolerance, and consult with a financial advisor before investing in mid-cap mutual funds. With the right investment approach, mid-cap mutual funds can be a great addition to a well-diversified investment portfolio.
Other Related Blogs: Section 144B Income Tax Act
Frequently Asked Questions (FAQs)
Q.What are mid-cap mutual funds?
Mid-cap mutual funds are mutual funds that invest in companies with a market capitalization between Rs. 5,000 crore and Rs. 20,000 crore. These companies are usually in the growth stage and have the potential to become large-cap companies in the future.
Q.What are the benefits of investing in mid-cap mutual funds?
Mid-cap mutual funds offer the potential for higher returns, diversification across various sectors, exposure to emerging sectors, and lower competition compared to large-cap stocks.
Q.Are mid-cap mutual funds risky?
Yes, mid-cap mutual funds are high-risk investments as mid-cap companies are relatively smaller and less established compared to large-cap companies. They can be suitable for investors with a moderate to high-risk tolerance.
Q.How do I choose the best mid-cap mutual fund to invest in?
It is important to consider factors like the fund manager’s track record, expense ratio, investment horizon, and risk tolerance before choosing the best mid-cap mutual fund to invest in. It is always recommended to do your own research and consult with a financial advisor before investing.
Q.Can I lose money by investing in mid-cap mutual funds?
Yes, investing in mid-cap mutual funds carries a risk of losing money as the stock market is subject to fluctuations. However, investing in a diversified portfolio of mid-cap companies across various sectors can reduce the risk of investing in a single stock or sector. It is important to have a long-term investment horizon and assess your risk tolerance before investing.
