All About Mid Cap Funds
23 Nov 2023
All About Mid Cap Funds
Mid-cap funds are mutual funds that primarily invest in stocks of companies with mid-sized market capitalizations. Investors can consider mid-cap funds for diversification into stocks with moderate to high level of risk and potential for higher returns compared to large-cap funds.
10-Year Performance of Mid Caps
Features of Mid-cap funds
1. Focus on mid-cap stocks
Mid-Cap funds invest predominantly in companies ranked between 101 and 250 in the list of stocks according to market capitalization i.e. they target companies roughly in the Rs 10,000 crore to Rs 30,000 crore market cap range.
2. Growth potential
These funds offer a balance between the growth potential of small-cap stocks and the stability of large-cap stocks. Potentially, they are tomorrow’s large caps.
3. Market volatility
Mid caps funds have historically outperformed large caps over a longer tenure however are more volatile in nature owing to mid cap funds investing in mid-size investee companies.
4. Investment horizon
It is imperative to treat funds invested midcaps as long term investments (atleast 5 years) due to thesir volatile nature and potential to evolve into large cap companies over longer periods.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision.
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