Mid-Cap Fund Returns 82% in 1 Year: Is It Too Risky to Invest In? Learn More
Considering Mutual Fund Investment Today? Mid Cap Funds Can Be a Good Option
Investing in mid-cap equity funds can be a promising choice if you are contemplating mutual fund investments today. This category of funds has delivered returns exceeding 82% in the last 1 year, indicating its potential for higher returns. Opting for mid-cap equity funds can potentially yield you better profits while bearing some level of risk.
Understanding Mid Cap Mutual Funds
Mid-cap mutual funds are funds that primarily invest in shares of mid-cap companies. Mid-cap companies are those whose market capitalization is more than ₹5,000 crores but less than ₹20,000 crores. From a market capitalization perspective, companies ranked between 101 and 200 are considered mid-cap companies.
Take Risks If You Can
Mid-cap funds tend to carry higher risks compared to large-cap funds. Therefore, those who can afford to take more risks in their investments should consider investing in these funds. Additionally, they offer good returns for long-term investments. In such scenarios, if you are looking to invest for more than 5 years, you can consider investing in them.
You Can Allocate 20-30% of Your Portfolio
According to experts, allocating 20 to 30% of your portfolio in mid-cap funds is advisable. This means that if you have a total of ₹100 to invest, you can allocate ₹20 to ₹30 in these funds. Investing a portion of your portfolio in mid-cap funds can be beneficial for long-term growth.
Investing through SIP Can Be More Beneficial
Instead of investing a lump sum amount in mutual funds, it is advisable to invest systematically through a Systematic Investment Plan (SIP). Through SIP, you invest a fixed amount every month. This reduces the risk significantly because it is less affected by market volatility.
Mid Cap Funds Have Delivered Better Returns in Recent Years
| Fund Name | Latest 1-Year Return | 3-Year CAGR | 5-Year CAGR |
|---|---|---|---|
| Quant Mid Cap Fund | 82.11% | 35.91% | 36.34% |
| Mahindra Manulife Mid Cap Fund | 68.69% | 29.96% | 29.06% |
| Nippon India Growth Fund | 60.72% | 30.53% | 27.07% |
| Motilal Oswal Mid Cap Fund | 58.82% | 37.69% | 29.34% |
| HDFC Mid-Cap Opportunities Fund | 58.68% | 29.82% | 26.41% |
Source: Grow, May 25, 2024
