In today’s times, investing your hard-earned money in the right place is a big challenge. Everyone wants their money to grow rapidly and beat inflation. In such a situation, due to excellent returns, mutual funds are becoming the first choice of investors. Through this, you can invest money in different places according to your convenience and risk appetite. There are many investment options available in the market, but these days ‘mid cap funds’ are attracting a lot of attention from investors. If you also want to take advantage of this boom in the stock market, then it is very important to understand A to Z of mid cap funds before investing money.
What is the game of mid cap funds?
Companies in the market are divided according to their size and market capitalization. Mid cap funds mainly invest your money in mid-sized companies of the stock market. These companies are neither very big nor very small. Being medium sized, these companies have immense potential to grow rapidly in the future and become large caps.
Since there is more scope for growth in them, their shares also have more chances of growth. If we talk about risk, there is less risk of losing money in these as compared to small cap funds. However, the risk level here is slightly higher compared to larger and established companies (large caps). Simply put, it is a type of equity mutual fund that tries to strike a balance between risk and return.
Is your money safe or not…who should invest?
There is a simple rule in the world of investment – where the returns are high, there will also be risk. Mid cap funds are also directly affected by the fluctuations of the stock market. If you are an investor who does not want to take huge market risks, but want to invest in emerging companies that are continuously growing over time, then mid cap can prove to be a great option for your portfolio. It is perfect for investors who want to earn good profits by taking moderate risk. However, while investing, it should always be kept in mind that its final return will depend on the market movements.
These 5 mid cap funds made investors rich in one year
In the last one year, many funds in the mid-cap category have performed beyond the expectations of investors.
- ICICI Prudential Midcap Fund: This fund has given the highest return of 24.89% in the last one year. Its NAV is Rs 344.58 and expense ratio is 1.03%.
- HSBC Midcap Fund: This fund, which is at second position, has earned a profit of 22.74%. Its NAV is Rs 436.32, while the expense ratio is only 0.65%.
- Mirae Asset Midcap Fund: It has generated returns of 19.31%. Its NAV has been recorded at Rs 38.4 and expense ratio is 0.56%.
- Nippon India Growth Mid Cap Fund: This fund has increased investors’ money at the rate of 19.01%. Its NAV is Rs 4519.78 and expense ratio is 0.72%.
- Invesco India Midcap Fund: This fund is also not lagging behind, it has given a return of 18.49% in one year. Its NAV is Rs 204.01 and expense ratio is 0.54%.
Invest lump sum money or take help of SIP?
After understanding mid cap funds, the biggest question that arises is what should be the right way to invest money in it. Should all the money be invested in lumpsum or should a small amount be invested every month? According to financial experts, Systematic Investment Plan (SIP) is the most effective and safe way to invest in equity funds like mid-caps. Through SIP, you invest money in the market every month or at a fixed time frame. Its biggest benefit is achieved when there is a huge fall in the stock market. When the market falls, you get more units of the fund at a cheaper price for the same money. Then when the stock market regains its momentum, the same units purchased cheaply become expensive and you get good profits on your old units.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.