MID CAP MUTUAL FUNDS

What is Mid Cap Mutual Funds?

Mid cap funds are those equity mutual funds that focuses on companies with a market cap in the middle range. Overall, midcap companies tend to offer more growth potential than large cap with less volatility than the small cap.

Your decision to invest in mid cap mutual funds must align to your risk tolerance, investment horizon and goals. Generally, if you have a long-term goal (say, 5 years or more), it is better to go for mid cap equity funds. It will also give the fund ample time to ride out the market fluctuations.

Who should Invest in Mid Cap mutual Fund

It will design for those who want to achieve your long-term financial goals and to take advantage of equity investments but do not want their returns to fluctuate more than the market (i.e. Sensex or NIFTY). They endeavour to provide better capital appreciation over the long-term and distribute dividends regularly. As they are financially strong, they are capable of withstanding bear markets, though there’s a risk that the mid-cap might underperform as compared to mid-cap or small-cap equity fund. Investors with low risk tolerance can benefit from investing in mid-cap funds.

Benefits and Advantages of a Mid-Cap Mutual fund

1.Mid-cap mutual funds have more potential for earning growth.
2. Mid Cap Mutual Funds help in wealth creation.
3. They are less resilient than small-cap funds.
4. When benefits of mutual funds are analyzed in totality, mid cap investment funds outperform all other funds.
5. Mid-cap fund mutual investments offer steady and low-risk returns. They are capable of withstanding a bear market.
6. Tax Benefits like Long term capital gains (LTCG) tax, Short term capital gains (STCG) tax, Investor does not pay any tax on dividends