Mid cap stocks have shown exponential growth in recent past and you can make lots of money investing in funds having mid cap stocks, but how much you invest in mid cap fund depends on your risk appetite.
Investing in the best mid cap funds can allow you to grow your money with moderately high to high risk exposure.
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A lot of people follow stock markets and wish to invest in the shares offered by various companies, but they fear that they don’t have enough knowledge or don’t have sufficient time to keep track on and follow the latest buzz about the dynamic market.
Mutual fund is the perfect solution for them as investing directly in equity market is a risk, not everyone willing to take.
In this article
- Best Mid Cap Funds to Invest in 2018
- Best Mid Cap Funds: Bonus List
- Tax on Mid Cap Mutual Funds
- What Is Mid Cap Mutual Fund?
Best Mid Cap Funds to Invest in 2018
The risk-adjusted returns of this fund are higher than category. Besides, this fund is more than 10 years old which gives it a good reputation. But risk of this fund is higher compared to the benchmark and also 1Y Returns are lower than the benchmark.
|Minimum SIP Amount||₹ 1,000|
|1 Year Returns||52.25%|
|3 Year Returns||25.21%|
|5 Year Returns||27.36%|
This fund too is over 10 years old, so performance can be easy to judge. It is slightly less risky when compared to the fund above. Risk is lower compared to the benchmark.
|Minimum SIP Amount||₹ 1,000|
|1 Year Returns||46.59%|
|3 Year Returns||24.51%|
|5 Year Returns||30.58%|
This fund too is over 10 years old. The expense ratio is on the lower side as compared to others. The one good thing of this fund is that its risk is lower than the benchmark.
|Minimum SIP Amount||₹ 500|
|1 Year Returns||49.33%|
|3 Year Returns||23.23%|
|5 Year Returns||28.54%|
Best Mid Cap Funds: Bonus List
The above 3 mid cap funds are top rated mid-cap funds. If however you need more options, you can check out this bonus list of top performing mid-cap funds.:
This is also a 5 star rated fund on Groww. It has performed very well in the last 5 years as well as the last 1 year.
L&T is very famous for its small-cap fund. That said, this mid-cap fund by L&T is a good performer too.
Kotak’s mid-cap fund is a good mid-cap fund with a 4-star rating on Groww. In the last 5 years, it hs given a return of 25.52% per annum which is very consistent.
This mid-cap fund by Principal is a good option too. In the last 5 years, it has managed to give an annual return of nearly 28% which is a good return for this category of fund.
In the last 5 years, this fund gave an incredible 30.04% per annum – which is a very good return.
HDFC is another company which is very famous for its small-cap fund. Its midcap fund is also doing well and is rated with 4 stars.
Aditya Birla SL Pure Value Fund is another great performing fund by Aditya Birla Mutual Fund. It gave returns in excess of 30% per annum for the past 5 years.
Tax on Mid Cap Mutual Funds
Taxation on mid cap funds depends on capital gain. Capital gain on mid cap funds is referred to the profit that an investor makes by redeeming or selling the mutual fund unit.
It can either be short term capital gain or a long term capital gain depending on holding period of fund. Tax applicable on capital gain is known as capital gain tax.
Capital gain tax is calculated based on:
1. Short-term Capital Gain tax:
This is applicable on mid cap mutual funds held for a period of 12 months or less i.e. anything less than 1 years. In short-term capital gain tax rate on these funds is 15% per annum on the amount of gain.
2. Long-term Capital Gain tax:
This is applicable on mid cap mutual funds held for a period of 12 months or more i.e. anything more than 1 years. In long-term capital gain tax rate on equity funds is NIL.
What Is Mid Cap Mutual Fund?
Stock market is broadly divided on basis of market capitalization as among large cap, mid cap, and small cap.
Mid cap are compact companies of the equity market, falling between small and large cap companies and are between 100-250 companies in a market after large cap companies.
Characteristics of Mid Cap Funds:
1. Stocks of mid cap companies are riskier then large cap but not as risky investment instrument as small cap.
2. Mid cap funds have better growth potential and give investors higher returns on investment as compared to large cap funds.
3. Investment in mid cap companies is best suited for investors with moderate risk appetite and is most popular among investors.
4. Liquidity of shares of mid cap companies is more as compared to small cap funds.
5. They are highly followed in stock market and usually tapped by institutional investors.
Mid-cap funds can be great investment instruments for investors looking for funds with high return possibilities, without the volatility of small caps and index-related returns like those of large cap funds.
Also, it is advisable to invest through SIP route as you will be able to derive the benefits of rupee cost averaging, your investment will not be skewed towards one side in the economic cycle and you can invest a part of your income every month without feeling any financial burden.
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Disclaimer: the views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document before investing.