Mutual funds are popular investment options in India as they offer professional management and diversification benefits to investors. Among the different types of mutual funds, mid-cap mutual funds are an attractive option for investors looking for higher returns with moderate risk exposure. In this article, we will explore the top mid-cap mutual funds in India for investors in 2021.
What are mid-cap mutual funds?
Mid-cap mutual funds are mutual funds that invest in companies with a market capitalization between Rs.500 crore to Rs.10,000 crore. These companies are generally less established than large-cap companies but have the potential for higher growth. As mid-cap companies are less established, their stocks are more volatile, and their valuations are subject to change.
Why invest in mid-cap mutual funds?
Investing in mid-cap mutual funds has several advantages. First, mid-cap companies have higher growth potential than large-cap companies, which can lead to higher returns for investors. Second, mid-cap mutual funds offer a higher degree of diversification than small-cap funds, which can reduce the overall risk of the portfolio. Finally, mid-cap mutual funds have a lower risk than small-cap funds, which can be beneficial for investors looking for higher returns without taking on excessive risk.
Best Mid Cap Mutual Funds to Invest in 2021 India
Investing in mutual funds is an excellent way to achieve long-term wealth creation. While there are different types of mutual funds available, mid-cap mutual funds are an attractive option for investors looking for high returns with a moderate level of risk. Mid-cap mutual funds invest in companies that have a market capitalization between Rs.500 crore to Rs.10,000 crore. These companies have a higher growth potential than large-cap companies and a lower risk than small-cap companies. Here are the best mid-cap mutual funds to invest in India in 2021:
- Kotak Emerging Equity Fund
The Kotak Emerging Equity Fund is one of the best-performing mid-cap mutual funds in India. The fund has a diversified portfolio of mid-cap and small-cap companies that are focused on growth-oriented sectors such as healthcare, consumer goods, and financial services. The fund has delivered an annualized return of 21.54% over the last five years and is well-suited for investors with a long-term investment horizon.
- HDFC Mid-Cap Opportunities Fund
The HDFC Mid-Cap Opportunities Fund is a popular mid-cap mutual fund in India that invests in companies with a market capitalization between Rs.500 crore to Rs.10,000 crore. The fund’s portfolio is well-diversified and includes companies from various sectors such as engineering, construction, and financial services. The fund’s investment strategy is based on a bottom-up approach, where the fund manager analyzes each company’s fundamentals before investing in it. The fund has delivered an annualized return of 19.31% over the last five years.
- Aditya Birla Sun Life Mid Cap Fund
The Aditya Birla Sun Life Mid Cap Fund is a top-performing mid-cap mutual fund in India that invests in mid-cap and small-cap companies. The fund’s portfolio is well-diversified and includes companies from various sectors such as engineering, construction, and financial services. The fund’s investment strategy is based on a blend of growth and value-oriented approach. The fund has delivered an annualized return of 20.73% over the last five years.
- SBI Magnum Midcap Fund
The SBI Magnum Midcap Fund is a well-known mid-cap mutual fund in India that invests in mid-cap companies with a focus on growth-oriented sectors such as healthcare, consumer goods, and financial services. The fund’s investment strategy is based on a combination of top-down and bottom-up approaches. The fund has delivered an annualized return of 17.33% over the last five years.
- L&T Midcap Fund
The L&T Midcap Fund is a mid-cap mutual fund in India that invests in mid-cap and small-cap companies. The fund’s portfolio is well-diversified and includes companies from various sectors such as healthcare, consumer goods, and financial services. The fund’s investment strategy is based on a blend of growth and value-oriented approach. The fund has delivered an annualized return of 19.25% over the last five years.
Conclusion
In conclusion, investing in mid-cap mutual funds can be a great way to diversify your portfolio and potentially achieve higher returns. However, it’s important to do your research and select funds that align with your investment objectives and risk tolerance. The top 5 mid-cap mutual funds discussed in this guide offer a range of investment strategies and have a strong track record of performance. By investing in these funds and holding for the long-term, investors can potentially benefit from the growth potential of mid-cap companies in India. It’s important to remember to regularly review your portfolio and consult with a financial advisor if you have any questions or concerns about your investments.
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Frequently Asked Questions (FAQs)
What is a mid-cap mutual fund?
A mid-cap mutual fund is a type of mutual fund that invests in companies with a market capitalization between Rs.500 crore to Rs.10,000 crore. These companies are generally less established than large-cap companies but have the potential for higher growth.
What is the difference between mid-cap and small-cap mutual funds?
Mid-cap mutual funds invest in companies with a market capitalization between Rs.500 crore to Rs.10,000 crore, while small-cap mutual funds invest in companies with a market capitalization of up to Rs.500 crore. Mid-cap companies are generally more established and less risky than small-cap companies.
What are the risks of investing in mid-cap mutual funds?
Mid-cap mutual funds are subject to higher volatility and may be more sensitive to market fluctuations than large-cap mutual funds. Additionally, mid-cap companies may have lower liquidity, which can make it difficult to sell their stocks during market downturns.
How can I select the best mid-cap mutual fund for my portfolio?
When selecting a mid-cap mutual fund, it’s important to consider factors such as the fund’s investment strategy, track record, and expense ratio. Additionally, it’s important to understand your investment objectives and risk tolerance to select a fund that aligns with your goals.
What is the ideal investment horizon for mid-cap mutual funds?
Mid-cap mutual funds are best suited for long-term investment horizons of at least 3-5 years. This allows investors to ride out short-term market fluctuations and benefit from the higher growth potential of mid-cap companies.
What is the expense ratio of mid-cap mutual funds?
The expense ratio of mid-cap mutual funds varies depending on the fund, but it typically ranges from 1-2% of the fund’s net asset value.
What is the minimum investment amount for mid-cap mutual funds?
The minimum investment amount for mid-cap mutual funds varies depending on the fund, but it typically ranges from Rs.5,000 to Rs.10,000.
Can mid-cap mutual funds be used for tax-saving purposes?
Yes, some mid-cap mutual funds such as HDFC Mid-Cap Opportunities Fund and Aditya Birla Sun Life Mid Cap Fund offer tax-saving benefits under Section 80C of the Income Tax Act.
How often should I review my mid-cap mutual fund portfolio?
It’s recommended to review your mid-cap mutual fund portfolio at least once a year to ensure that it aligns with your investment objectives and risk tolerance. Additionally, you should review your portfolio after major market fluctuations or changes in the fund’s performance.
What are the tax implications of investing in mid-cap mutual funds?
Mid-cap mutual funds are subject to capital gains tax when sold or redeemed. Short-term capital gains are taxed at a higher rate than long-term capital gains. Additionally, some mid-cap mutual funds may offer tax-saving benefits under Section 80C of the Income Tax Act.
