Join us on Telegram for the latest market news and updates

Best Midcap Funds for 2022

  • Akshatha Sajumon
  • Feb 07 2022
  • 9 minutes
Share on

Mutual Funds are one of the safest investment options for an investor today. These funds are carefully formulated to provide the investor with maximum returns on their investment. While selecting a fund for investment, the investor needs to consider many factors one of which is the category of funds. There are three broad categories of companies that mutual funds invest in namely, large-cap funds, mid-cap funds, and small-cap funds. Investors can select a suitable investment product depending on their risk appetite, return expectations, amount of investment that they can make, etc. 

Given below are the details of the mid-cap funds and the best mid-cap funds for investment today.

What are midcap funds?

Mid-cap funds are equity mutual funds that invest a minimum of 65% of their assets in companies that have medium market capitalization. This means that the market capitalization of these companies is anywhere between Rs.500 crores and Rs.10,000 crores. Investment in mid-cap companies is a high-risk high-return scenario. These companies have the potential to perform better than the large-cap companies in the time of a bullish market. However, during a bearish market, these investments fall hard.

Things to keep in mind about midcap funds

There are many risks associated with an investment in mid-cap funds. Investors need to have thorough market research and analysis before investing in mid-cap funds. The details of some of the risks associated with mid-caps are mentioned below,

  • Inherent risk

While investment in mid-cap funds is fruitful in long term, mid-cap companies can potentially take a huge hit during bearish times. This is on account of such companies having a low customer base and relatively fewer resources to sustain a heavy economic slowdown. Although the fund managers take due care before investing in any mid-cap company, there is always a high inherent risk that cannot be completely evaded. 

  • Liquidity

Liquidity in any fund is of key importance and it also affects fund returns. Mis caps have relatively fewer shares in the market which makes it difficult to make an immediate exit.

  • Market fluctuations

Mid-cap funds are prone to high volatility at the time of market fluctuations. The fluctuations of the market can lead to a huge decline in mid-cap funds which may not happen in large-cap funds. 

Top midcap funds

  • Kotak Emerging Equity Scheme Growth

About the Fund

Kotak Emerging Equity Scheme Growth is a mid cap fund having investments in equity and equity-related securities in mid cap companies. This is an open ended fund with an exit load of 1% if the fund is sold before the completion of 12 months.

Inception Date 30th March 2007
Benchmark Name Nifty Midcap 100 TRI
Fund Manager Mr. Pankaj Tibrewal
Objective To provide long-term capital appreciation through a portfolio of equity and equity-related securities by investing predominantly in Midcap companies.

 

Sector Allocation

The sector-wise allocation of investments across the fund is tabled below.  

Sectors Percentage Allocation
Industrial Manufacturing 19.81%
Consumer Goods 13.97%
Financial Services 12.91%
Fertilizers and Pesticides 7.29%
Cement & Cement Products 6.7%
Automobile 6.06%
Pharma 5.95%
Construction 5.62%
Metals 4.82%
Chemicals 4.58%
Others 12.29%

Historical Return of the Fund (annualized)        

Period 6 months 1yr 3 yr 5 yrs
Returns 39.98% 30.34% 13.81% 20.63%
  • Edelweiss Midcap Fund Growth

About the Fund

Edelweiss Midcap Fund Growth is another open-ended equity midcap fund predominantly investing in midcap companies that are potential wealth creators. The scheme sleets the stocks to invest in based on careful analysis of the company, its products, growth potential, potential to withstand the downturn of the economy, etc. 

Inception Date 26th December 2007
Benchmark Name Nifty Midcap 100 TRI
Fund Manager Mr. Harshad Patwardhan
Objective To provide long-term capital appreciation through equity portfolio by investing predominantly in Midcap companies.

 

Sector Allocation

The sector wise allocation of investments across the fund is tabled below.  

Sectors Percentage Allocation
Financial Services 23.01%
Consumer Goods 15.57%
Industrial Manufacturing 13.14%
Automobile 10.62%
Fertilizers and Pesticides 4.85%
Construction 4.75%
IT 4.57%
Cement and Cement Products 3.99%
Pharma 3.58%
Chemicals 3.17%
Others 12.75%

 

Historical Return of the Fund (annualized)

Period 6 months 1yr 3 yr 5 yrs
Returns 40.98% 35.16% 12.81% 19.49%
  • Axis Midcap Fund Growth

About the Fund

Axis Midcap Fund-Growth invests in mid-cap companies that have the potential to provide higher returns based on their growth trajectory. The fund has hugely diversified investments across various sectors or industries. 

Inception Date 18th February 2011
Benchmark Name S&P BSE Midcap TRI
Fund Manager Mr. Shreyash Devalkar
Objective To provide long-term capital appreciation through equity and equity related instruments portfolio by investing predominantly in Midcap companies.

 

Sector Allocation

The top sector wise allocation of investments across the fund is tabled below.  

Sectors Percentage Allocation
Financial Services 20.18%
Consumer Cyclical 20.12%
Basic Materials 14.60%
Industrials 12.20%
Technology 11.41%
Healthcare 10.24%
Consumer Defensive 5.98%
Utilities Services 2.95%
Communication Services 2.31%

 

Historical Return of the Fund (annualized)

Period 6 months 1yr 3 yr 5 yrs
Returns 30.93% 27.93% 19.68% 21.23%
  • HDFC Mid-Cap Opportunities Fund

About the Fund

This fund was initiated in the year 2007 and has invested in targetted mid cap companies that have huge growth potential with assessed risk. The fund invests in companies with sustainable growth models, good financial strength, etc that provide a reasonable opportunity for the investors to gain higher returns on their investment.

Inception Date 25th June 2007
Benchmark Name NIFTY MIDCAP 100 TRI
Fund Manager Mr. Chirag Setalvad
Objective To generate long-term capital appreciation through investment in predominantly Midcap companies.

 

Sector Allocation

The top sector wise allocation of investments across the fund is as below.

Sectors Percentage Allocation
Financial Services 20.48%
Engineering  12.06%
Chemicals 13.14%
Consumer Durables  10.10%
Automobile 8.74%
Healthcare 7.75%
FMCG 5.93%
Metals 5.10%
Technology 4.12%
Services 3.95%
Construction 3.40%
Others 5.23%

 

Historical Return of the Fund (annualized)

Period 6 months 1yr 3 yr 5 yrs
Returns 34.77% 28.05% 9.53% 17.71%
  • UTI Mid-Cap Fund

About this Fund

This mid cap fund invests predominantly in mid cap companies that have a higher growth potential than large cap companies. The fund is ideal for investors looking for higher returns but also has an appetite for high risk and can stay invested in the fund for a long term (preferably for at least 5 years). 

Inception Date 7th April 2004
Benchmark Name NIFTY MIDCAP 150
Fund Manager Mr. Ankit Agarwal
Objective To generate long-term capital appreciation through investment predominantly in equity and equity related securities of Midcap companies.

 

Sector Allocation

The top sector wise allocation of investments across the fund is tabled below.

Sectors Percentage Allocation
Consumer Goods 20.55%
Financial Services 15.47%
Industrial Manufacturing 12.4%
Automobile 8.03%
IT 7.29%
Pharma 6.57%
Fertilizers & Pesticides 6.3%
Healthcare Services 5.64%
Technology 4.12%
Services 3.95%
Construction 3.40%
Others 5.23%

Historical Returns of the fund (annualized)

Period 6 months 1yr 3 yr 5 yrs
Returns 35.76% 34.99% 10.16% 16.36%

 

How to invest in Mid cap funds? 

Investing in the midcap funds is very easy now. Investors can simply download the Finity App (available on the Google Playstore as well as Appstore) and start investing by adding basic details like a bank account and providing the necessary KYC. The steps to invest in midcaps through the app are stated below.

  1. The first step is to download the application from the playstore and open it.
  2. The investor will have to login using their email id and phone number to proceed.
  3. After that, the investor will have to provide their bank details and basic KYC to start investing in their chosen midcap fund.
  4. To start the investment procedure after logging in, the investor will have to select ‘Equity’ from the home page and then select ‘Mid Cap’
  5. The investor will be taken to a new page displaying all the available midcap funds and has the option to view the details of any fund (returns, portfolio, fund facts, etc)
  6. The next step is to click on ‘Invest’ 
  7. The investor can select to invest as ‘SIP’ or ‘Lumpsum’ and then enter the desired amount of investment.
  8. After that, the basic details will have to be entered followed by the payment procedure to complete the investment procedure.

Conclusion

Investment in mid cap funds is considered to be a high-risk investment. But these companies have the potential to provide higher returns than large cap companies in the long run. An investor needs to stay invested in this product for a longer period of time (at least 5 to 7 years) for the fund to grow and generate higher returns. Investors can start with an investment amount as low as Rs. 500 per month or lump sum amount of Rs. 5000 in most of these schemes to gradually build a corpus fund that will yield higher returns in long term.


Frequently Asked Questions

What are the three broad categories of mutual funds based on the market capitalization of companies?

The three broad categories of mutual funds based on market capitalization of companies is,

  • Large Cap Funds 
  • Mid Cap Funds
  • Small Cap Fund

What is the minimum investment of a mid cap fund needed in mid cap companies?
Mid cap fund has to invest a minimum of 65% of the fund in the mid cap companies.

Is mid cap suitable for risk averse investors?
Investing in mid cap funds is a high risk high return scenario. It is relatively riskier than investing in large cap funds. Hence it is more suitable for investors with a high risk appetite.

What is an expense ratio for mutual funds?
Expense ratio is the charges levied by the fund to manage the investment portfolio of the investor. It is a nominal charge and is expressed in terms of percentage.

What are the rankings of the stocks invested in the midcap segment?
Mid cap funds segment are the funds that invest in stocks ranking from 101 to 250th in terms of market capitalization  as per the revised guidelines of SEBI.

Share on
Similar Blogs