Best Mid Cap funds to invest in FY 2018 – 2019
As we said in our previous article listing Best Small cap funds that for a long term portfolio small cap and mid cap funds are essential as they have high potential for growth. Here, we will discuss the advantages of mid cap funds and will list the best mid cap funds to invest.
Advantages of Mid Cap Funds
- Growth with Safety
Mid Cap funds have dual advantage of high growth potential like small cap while being safer than them and having low volatility in their returns and hence giving a better risk adjusted performance. Also, they are more dependable than small cap funds as they should be able to survive any setback in the terms of business.
- Proven Winners
Today’s mid caps are small caps of yesterday as they have managed to leave a mark and proven the sustainability and growth potential of their business plans.
- Future Prospects
Mid cap companies sometimes are acquired by large cap companies which are looking for fast growth or new markets. Such buyouts can potentially boost investment returns.
Best Mid Cap funds
This fund launched in 2009 and since then it has beaten the benchmark (S&P BSE 200) every year. Its returns for last 5 years are 28.82% which is almost double of the benchmark’s returns of 14.48% and significantly higher than that of the category’s returns of 23.42%. The fund invests across sectors and tries to find out potentially undervalued stocks. Though, the fund has majority of its portfolio in mid cap stocks (~48%), it has also invested a considerable portion in large cap (~37%) with small exposure of around 15% in small caps.
The fund sticks to its name and invests around 60% of its portfolio in Mid-Cap stocks which is higher than that of the category’s average allocation. This approach coupled with good stock selection has resulted in superior returns. The fund is almost 24 years old and has beaten the benchmark 8 times in last 10 years. The fund has given returns of 26.52% in last 5 years which are way higher than the 10.54% returns of its benchmark (NIFTY 500). The fund remains invested in its top two picks – Yes Bank & Finolex cables since 2008 and 2009 respectively which show the confidence of the fund manager in its picks.
The fund is aggressive in approach and around 80% of its portfolio is in mid and small cap stocks out of which around 55% is made up of mid caps. The fund has been a top performer and has picked up after the under performance of starting years and has beaten the benchmark every time in last 5 years. The 5 year returns of the fund are 27.57% while that of the benchmark (Nifty mid small cap 400) are 21.56%. The 10 year returns of the fund are an impressive 17.18% while the figure for the benchmark is only 11.19%.
Let us see some of the key performance parameters of these funds:
For a long term portfolio Mid caps are a must, though only after proper understanding of the risks associated with them. The investment horizon in a mid cap fund should be at least 7-10 years.
Start Investing in the above mentioned best mid cap funds on WealthTrust App.
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