Mid-cap mutual funds are a type of equity mutual fund that invests in mid-sized companies. Mid-cap companies are those that have a market capitalization of between Rs. 500 crore to Rs. 10,000 crore. They are generally considered to be more risky than large-cap companies, but they also have the potential to generate higher returns.
Why Invest in Mid-Cap Mutual Funds?
There are several reasons why you might want to consider investing in mid-cap mutual funds.
- Potential for high returns: Mid-cap companies are often growing at a faster rate than large-cap companies. This means that they have the potential to generate higher returns over the long term.
- Innovative companies: Mid-cap companies are often more innovative than large-cap companies. This means that they are more likely to come up with new products and services that can disrupt the market.
- Undervalued companies: Mid-cap companies are often undervalued than large-cap companies. This means that you can potentially get a better deal on your investment.
Also, read it –Large-Cap Mutual Funds
How to Choose the Right Mid-Cap Mutual Fund?
When choosing a mid-cap mutual fund, it is important to consider the following factors:
- Fund manager’s track record: Look for a fund manager with a proven track record of generating returns in the mid-cap space.
- Fund size: Mid-cap funds can be volatile, so it is important to choose a fund that has large enough size to withstand market fluctuations.
- Expense ratio: The expense ratio is the fee that you pay to the fund manager for managing your money. Choose a fund with a low expense ratio to maximize your returns.
- Investment objective: Make sure that the fund’s investment objective aligns with your own investment goals.
Conclusion
Mid-cap mutual funds are a type of equity mutual fund that invests in mid-sized companies. They offer the potential for high returns, but they are also riskier than large-cap funds