midcap mutual funds
Midcap mutual funds have emerged as major wealth creators for investors in the last few years. While large-cap funds offer stable returns and small-caps are more risky, midcap funds have become a balanced option between the two. Over the last decade, midcap funds have outperformed most major equity categories with an average annual return (CAGR) of 16.22%. Amidst this strong performance, there are three funds which have benefited SIP investors the most.
Top 3 SIP Champion Funds
Motilal Oswal Midcap Fund (22.78%), Invesco India Mid Cap Fund (22.73%) and Edelweiss Mid Cap Fund (22.66%) led the 10-year SIP return ranking. All three have given almost equal returns to their investors and have taken a monthly SIP of Rs 10,000 to around Rs 40 lakh. This is almost a four-fold increase, which shows how big returns regular investments can give in the long run.
SIP vs Lumpsum: Which is Better?
Interestingly, the ranking of funds changes in the 10 year returns of lumpsum investment. In this case, Invesco India Mid Cap Fund (20.20%) is at the forefront, followed by Edelweiss Mid Cap Fund (19.89%) and Motilal Oswal Midcap Fund (19.25%). It is clear from this that doing SIP in midcap category is more beneficial because it handles the ups and downs of the market better.
Funds’ Strategy and Portfolio Focus
Motilal Oswal Midcap Fund is inclined towards technology and household consumption sectors. Its major stocks are Persistent Systems, Coforge and Dixon Technologies. Invesco India Mid Cap Fund focuses on financials and consumer-tech, which includes companies like AU Small Finance Bank and Swiggy. Edelweiss Mid Cap Fund has a more diversified portfolio. Investing equally in tech, healthcare and financials.
advice for investors
Although the performance of these funds has been strong in the last 10 years, there is no guarantee that they will get similar returns in the future also. Midcap funds are more affected by market movements. Therefore, it is important to keep in mind your risk profile, goals and stability of the fund before investing. It would be better to seek advice from a SEBI-registered financial advisor before taking a decision.