Mid Cap Mutual Funds

Mid-cap mutual Funds enable you to invest in India’s fast growing companies with a market capitalisation in the range of Rs.5000 Cr to Rs.20000 Cr and a rank between 101 to 250. Mid-cap mutual fund companies (AMC’s) pool your money and invest in these mid-cap companies.

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Excellent for long term investment

Excellent for long term investment

Probabilities of higher growth than large cap

Probabilities of higher growth than large cap

Lesser risky as compared to small cap

Lesser risky as compared to small cap

Offers diversification to your investment portfolio

Offers diversification to your investment portfolio

What are Mid Cap Mutual Funds?

Mid cap mutual funds are those mutual funds wherein the mutual fund company (AMC) invests your money in a set of mid cap companies. These mid cap companies market capitalisation ranges from 5,000 crore to 20,000 crore. These mid cap companies range from 101-250. 

These types of mutual funds are regulatorily and strategically meant to allocate the investment pool to only the mid cap companies. The Mutual Funds companies (AMC’s) and their fund managers typically create a portfolio mix where they look at the company’s past performance and long term growth potential, valuation, quality of management team and opportunity size of the industry. These AMC’s often rebalance the portfolio based on the latest earnings and new information that they learn so as to deliver long term growth and reduce risk. 

List of Best Mid Cap Funds to Invest Today

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Mid Cap Mutual Funds SIP Calculator
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Start SIP in Mid Cap Mutual Funds as low as Rs. 100

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Advantages of investing in Mid Cap Mutual Funds

Mid Cap mutual funds are a great investment tool that offers various benefits and advantages. Let’s have a look at the following advantages of the mid mutual funds.

  • Immense growth potential

    The companies that are included in the mid cap mutual funds have great potential for future growth. Since the companies are not in the news, these are mostly undervalued. Hence there are high chances that when the growth will be accelerated so will be the returns along with it.

  • Offers Diversification

    Investing in mid cap mutual funds provides diversification to your investment portfolio. The main objective of any portfolio is to minimize the risk and maximize the return, by investing in mid cap mutual funds you offer room for risk management.

  • Professionally managed

    As an investor in Midcap mutual funds, your investments are managed by experienced & qualified fund managers of the AMCs. These AMC’s and fund managers perform their analysis and due diligence to make the choice of the mid cap companies. 

Limitations of investing in Mid Cap Mutual Funds

Even if the best mid cap funds can be advantageous for you, it carries certain risks just like any other equity investment.

  • Volatility Risk

    Due to the heightened volatility of mid-sized companies, the performance of mid cap mutual funds may be more volatile than large cap mutual funds.

  • Limited Track Record

    Mid cap mutual funds could invest in companies that do not have a very long track record or long history like the large cap mutual funds. Therefore, a lot of decisions by the mid cap mutual fund managers could be made based on due diligence and management interviews rather than long historical date and track record. 

  • Mid Cap Mutual Fund managers’ Managerial Skill Dependency

    Mid cap mutual fund investing demands professional fund managers who can recognise attractive mid cap stocks. The performance of mid cap mutual funds is frequently contingent on the Fund manager's ability to make sound investment decisions. Without experienced and skilled management, the fund may struggle to outperform the market.

Who should invest in Mid Cap Mutual Funds?

Investing in mid cap mutual funds is Suitable for people who have a higher risk taking appetite and a long term investment horizon. It is also important to note that one should not purely invest in Mid Cap mutual funds but also choose to diversify across Large Caps as well as ensure allocation to the very low risk Debt mutual Funds.

    Points to Consider Before Investing in Mid Cap Mutual Funds

    How to Start Investing in Mid Cap Mutual Funds with INDmoney

    • Step 1

      Download the INDmoney app and create your free investment account by   completing your KYC ( Know Your Customer)

    • Step 2

      Once your Free investment account is ready, you can either search for a mid cap mutual fund or go to the mutual fund section and tap on mid cap mutual funds.

    • Step 3

      Choose a mid cap mutual fund by looking at aspects like past returns, volatility, downside capture ratio, AUM, Expense ratios and underlying stocks and sectors.

    • Step 4

      You can choose to set up SIP in mid cap mutual funds or even invest as lumpSum. Once you are on the individual mid cap mutual Fund page click from the bottom “One-time” for lump sum investment or “SIP” for systematic investment plan.

    • Step 5

      Choose the amount that you want to invest as SIP or LumpSum. 

    • Step 6

      Set up payments. If you choose to set up SIP in mid cap mutual funds,  you can do a free automatic pay set up via bank mandate or UPI. If you choose to invest in lumpsum (one-time) then you can pay via UPI, netbanking, NEFT or RTGS.

    Should You Invest in a Mid Cap Mutual Fund?

    If you have a long term investment horizon (7 year+) and have the ability to take risks, especially in the short term then mid cap mutual funds are a good investment solution for you to build your wealth and benefit from compounding. Download the INDmoney app on your mobile phone today and start investing in the top rated mid cap mutual funds.

    Frequently Asked Questions

    Yes, we have an option of Flexi SIP where we can pause and restart the SIP.

    We also give an option to edit our SIP anytime. Follow the steps below to change the SIP amount.

    Step 1: Go to the SIP section, under the mutual fund dashboard.

    Step 2: Open SIP Summary Page and click on manage SIP

    Step 3: A bottom sheet will appear, click on edit SIP.

    Step 4: An invest page will open, here you can edit your amount.

     

    Note : Maximum Mandate amount should cater the new updated SIP amount.

    For Example, if you have started a SIP via UPI and you have created a mandate for Rs 10000. In this case if you edit your SIP amount to 15000, you will receive invalid input.

    You can edit the amount between SIP minimum investment amount ( created by AMC )  to maximum mandate amount ( created by user )

     

    Returns that you get from your top mid cap mutual funds investment are taxable under the Indian Income Tax Act, 1961. Tax is levied in the following way - 

    • Under Capital Gains
      • Short-term capital gains at 15%
      • Long-term capital gains (over Rs. 1 lakh) at 10%
    • Tax on Distributed Income Dividend Option
      • At applicable income tax slab

        Read More about how mutual funds are taxed.

    Based on 5 year returns, the best mid cap mutual funds to invest in 2024 are

    Mid Cap Mutual Fund invest money in companies whose market cap ranges from 5000 crore to 20,000 crore and ranks between 101-250.

    Mid Cap Funds have on an average delivered 23.96% return per annum in the last 5 years. Their 3 and 10 year annualized returns are 25.7% and 21.35% p.a.

    Mid Cap Funds allow you to invest in future leaders of the stock market. Most big large cap companies of today were mid caps at some point. Mid caps tend to grow faster as they strive to become market leaders. However, not every mid cap goes on to become a big company.

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