mutual fund investment
Mutual fund investors are busy diversifying their portfolio. A look at the data from the Association of Mutual Funds of India (AMFI) shows that investors are opting for flexi cap and mid cap funds to expand their portfolio, which till now was dominated by large cap and small cap mutual funds.
Data from the Association of Mutual Funds in India (Amfi) shows that flexi cap mutual funds remained on top, where investments increased from Rs 7,029 crore in September this year to Rs 8,929 crore in October. Investment in midcap mutual funds stood at Rs 3,807 crore, which is the second highest among all equity funds. Net investment in equity mutual funds has declined by about 19%. Among equity mutual funds, largecap and smallcap funds have suffered the most losses, because investors are preferring to invest in flexicap and midcap mutual funds.
25 percent return in 3 years
Although flexi cap mutual funds continue to dominate, interest in the mid cap mutual fund category is increasing. Since midcaps are also part of the flexi cap portfolio, market analysts believe that this category is at the forefront for its performance. Over the last three years, Nippon India Growth Midcap Fund has delivered an impressive return of 25.13%, at a time when most equity funds are lagging. Over the same period, UTI Midcap Fund and DSP Midcap Fund have given returns of 21.22% and 18.44% respectively. Interestingly, in the last three years, out of 35 midcap funds from various AMCs, only five midcap funds have given returns below 20%, and the lowest returns have been above 15%, indicating a solid performance of the midcap fund category.
Increasing confidence in midcap funds
Take Nippon India Growth Mid Cap Fund, which was launched more than 30 years ago. This fund has given returns at an impressive CAGR rate of 22.28% since its inception. This fund invests in companies that deliver above average growth and have the potential to deliver good returns over time. The success of this fund is due to a well-defined investment process, rigorous risk management and thorough research. In comparison, Franklin Mid Cap Fund, which completed 33 years on December 1, has returned 19.21% since its inception. Mid cap funds are ideal for long-term investments and since they prioritize capital appreciation, investors get a steady rise in the value of the investment over time. Additionally, mid cap funds facilitate diversification across sectors, which helps in reducing risk.