Generally, investors having a high-risk appetite consider mid-cap companies for investments. Mid-cap companies are those whose market capitalization is between $2billion and $10 billion. However, please note that these figures are only indications; one investor may regard a $5 billion cap-company as big, while for another, the same company might be small. An investor aiming at higher returns and willing to wait for a 3-5 year period can consider investing in mid-cap mutual funds. Before taking any investment decision, you must check your risk appetite. This article will give you the top performing mid-cap funds of 2019 which will help you in achieving your financial goals or objectives.
Best Mid-cap Mutual Funds to Invest in 2019
|Mid Cap Funds||Launch Date||Min. Investment||1 Yr Return (%)||3 Yr Return (%)||5 Yr Return (%)||Return Since Launch (%)||Exit Load||Key Holdings|
|HDFC Mid Cap Opportunities Fund|
|January 25, 2007||Rs.5,000||10||13.5||29.1||17.14||1%|
for redemption within 365 days
|Sundaram Fastener, Balkrishna Industries, Cholamandalam Fin &Invest|
|December 01, 1993||Rs.5,000||8.59||12.64||27.30||20.39||1%|
for redemption within 365 days
|Finolex, Yes Bank, LIC Housing Finance|
|Axis Mid-cap Fund (G)|
|February 18, 2011||Rs.5,000||22.7||10||26.8||19.10||For units in excess of 10% of the investment,1% will be charged for redemption within 365 days||Gruh Finance, Supreme Industries, Baja Finance|
|ICICI Pru Mid Cap||October 28, 2004||Rs.5,000||7||9.3||28.7||17.99||1% for redemption within 365 days||Exide, Tata Chemicals, Indian Hotels, Thomas Cook, PI Industries, Fortis Healthcare|
|Invesco India Mid Cap Mutual Fund||April 19, 2007||Rs.5,000||16.57||12.21||28.18||15.45||1% for redemption within 365 days||Balkrishna Industries, United Breweries, Indraprastha Gas|
|Kotak Emerging Equity Fund (G)|
|March 30, 2007||Rs.5,000||8.45||13.05||30.72||12.86||1% for redemption within 365 days||Thermax, Shriram City Union Finance, Finolex Cables, Solar Industries, Ramco Cements|
|L&T Mid Cap Fund (G)||July 23, 2004||Rs.5,000||7.69||15.60||31.19||20.85||1% for redemption within 365 days||Bharat Fin, Ramco, Cholamandalam, Graphite India, Berger|
|UTI Mid Cap Fund (G)||April 07, 2004||Rs.5,000||5.87||7.94||28.85||18.67||1% for redemption within 365 days||M&M Financials, Indraprastha Gas, Torrent Power, Apollo Tyres, NALCO, Mphasis|
|DSP BlackRock Midcap Mutual Fund (G)||November 14, 2006||Rs.5,000||8.81||13.17||29.34||15.67||1% for redemption within 364 days||Exide Industries, City Union Bank, Ramco Cements, Supreme Industries, Solar Industries, Edelweiss|
|Edelweiss Midcap Fund (G)||December 26, 2007||Rs.5,000||13.02||11.43||28.66||10.30||1% for redemption within 365 days||RBL, Biocon, Indian Hotels, Page Industries etc.|
Benefits of Investing in Mid-cap Funds
During stock market rallies, some stocks in mid-cap mutual funds may outperform those of large-cap companies. In a bear phase, the same stocks might underperform, so investors must be ready for volatility.
The biggest advantage of investing in mid-cap mutual funds is that companies in this portfolio are often under-researched. Many investors either do not understand such companies or have a sketchy knowledge about them. Smart investors do detailed research of these companies and often get good returns. In the case of large-cap mutual funds, the portfolio companies are quite well known so there are many takers for those schemes.
Research has indicated that over the last decade, mid-cap mutual funds have delivered nearly 400% returns while the yield from large caps has been 350%. In terms of volatility, the standard deviation of large-caps is half of that of mid-cap mutual funds, so it makes sense to calculate the trade-off between risk and return.
Things to Keep in Mind Before Investing in Mid-cap Funds
● Performance of the asset management companies
Check the yields of these companies since their inception. The best mid-cap mutual funds companies deliver consistent growth over a period of time. Do not go by the compounded growth rate since their inception, alone. This figure may look tempting because of the performance of a particular industry sector and may not represent secular values.
● Portfolio of these companies
Investors should actively check the portfolio of these companies. Do your own research and find out the performance of these companies in the last 5-10 years. It is also important to note the performance of the industries that these companies represent. Research about those mid-cap mutual funds companies that have holdings in sectors like construction, drugs, transport, healthcare etc. Companies in these sectors stay in business for a long time.
Very importantly, it is advisable to arrive at your risk appetite before you settle for your preferred mid-cap mutual funds. Industry experts suggest that it is alright to park 30-40% of your funds in your preferred fund company.
● Fund manager
Every fund is managed by a fund manager. You can check his or her performance online. This information is readily available.
● Minimum investment
The minimum investment in most of the mid-cap mutual funds is Rs. 5,000. For most investors, this figure is affordable.
● Exit load
Most mid-cap mutual funds charge an exit load from their investors. This is the money charged from the investor while he/ she is exiting from the scheme. Typically, this figure is represented in a percentage form. Mutual fund companies typically charge 1% as exit load if the investment is redeemed before 365 days (1 year).