What are Mid cap funds?
Mid cap funds are open ended equity schemes predominantly investing in mid cap companies. The scheme invests minimum 65% of total assets in equity and equity related instruments.
Mid cap companies are defined by companies that are ranked from 101st to 250th by market capitalization.
Why one should invest in Mid cap funds?
Mid cap companies can either be well established or relatively new however the potential for growth in profits is huge. Over a period of few years mid caps have shown exponential growth and have given decent returns to its investors, but investment in such funds depend on your risk appetite.
Also, mid caps have outperformed large cap funds and are less volatile as compared to small cap funds.
Invest in Mid Cap Funds to get better returns
Who should invest in Mid cap funds?
Investing in mid cap funds is recommended for investors who have investment horizon of more than 7 years and have a high risk tolerance. If you are an investor who is willing to take greater risks and exposure to volatile market you can invest in these schemes.
What is tax implication on Mid cap funds?
Since Mid cap funds invest more than 65% in equity and equity related instruments they carry taxation under equity oriented schemes. Gains earned on equity oriented schemes are taxable depending on holding period. Gains on investment horizon of upto 1 year are called short term and the rate of tax applicable is 15%.
Gains on Investment horizon of more than 1 Year are called Long Term Capital Gains. Long Term Capital Gains over and above Rs.100,000 are taxable at 10% without indexation.
Available Mid cap funds:
How to invest in Mid Cap Funds:
1. Log in on your Finity app