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Mid Cap Funds

Mid cap funds are a type of equity mutual funds that invests in the stock of mid-sized companies. According to the norms, companies that are ranked from 101 onwards till 250 based on their market capitalization, are categorized as mid cap companies.

1. Things to Consider Before Investing in Mid Cap Funds

  • Investment Goals: While investing in an equity mutual fund, normally it takes at least 5 years for the investment to give good returns. This period extends even more in the case of mid cap mutual funds. That's because in the event of an economic downturn they get affected more than large cap companies, and might take some years to recover. So one should have a long term investment goal in mind like early retirement, child's education, etc. while planning to invest in mid cap funds.
  • Returns: Mid Cap Funds generally tend to deliver market-beating returns over a long term. However, in a short to medium period, they might underperform. So investors need to be prepared to stay invested if they want to benefit from this fund category.
  • Risk: Not all mid cap companies grow to become large caps. In a tough market, there have been instances of mid caps going bankrupt. And while that is an extreme scenario, even if the company is not able to deliver on its return potential for whatever reason, the mutual fund holding that company or companies might not deliver the returns
  • Expense Ratio: There are expenses that eat into your returns. In order to manage the mid cap fund, the Asset Management Company (AMC) charges a fee from you on an annual basis called Expense Ratio, which reduces your real returns. So you should always try and pick a fund that has the least expense ratio coupled with a good track record.

2. Top 5 Performing Mid Cap Mutual Funds

Let's look at some of the top performing mutual funds helming the mid cap category. The performance is based on the basis of returns provided by the fund in the last 3 and 5 years.

Fund Name 3-year Return (%)* 5-year Return (%)*
Quant Mid Cap Fund Direct-Growth 41.19% 22.05% Invest
PGIM India Midcap Opportunities Fund Direct-Growth 44.06% 21.31% Invest
Axis Midcap Direct Plan-Growth 27.35% 18.74% Invest
Edelweiss Mid Cap Direct Plan-Growth 31.92% 17.15% Invest
Kotak Emerging Equity Fund Direct-Growth 30.64% 17.09% Invest

*Last updated as on 12th Sep 2022

3. How Can you Invest in Mid Cap Funds through ET Money?

It is quite easy to invest in Mid Cap Funds on ET Money. All you need to do is just follow these below mentioned steps:

  • Download ET Money app or visit
  • Find the Mid Cap Fund you want to invest in
  • Click on Invest Now, enter the amount and mode of investment
  • Provide basic details like Pan & Bank Details & you are all set.

4. Frequently Asked Questions (FAQs)

Who Invests my Money into Stocks of Mid Cap Companies?

So first, you invest your money into the fund and subsequently you are allotted the units of the fund. There are several other investors like you who invest money in mid cap funds. Collectively all the money of all the investors that have subscribed to the units of the fund, are eventually invested in stocks of mid cap companies by the fund manager. Before making an investment, a fund manager does a rigorous research into the company's potential by going through their management details, balance sheet statements etc. So don't worry, your money is in qualified and experienced hands.

How much money do you need to start investing in mid cap mutual funds?

The best thing about any mutual fund is that you don't need to have huge amounts of money to invest in them. All mutual funds provide you the periodic investment of SIP (Systematic Investment Plan) through which you can invest an amount as low as ₹500.

What is the Difference between multi Cap and mid Cap funds?

It's easy to get confused between these funds because of their nomenclature. These are two entirely different types of equity mutual funds. A multi cap fund is a diversified equity fund which invests in companies of all sizes. The portfolio mix in a multi cap fund may include some blue chip companies along with mid companies and even small cap companies. Whereas mid cap funds are just restricted to investing in mid cap companies.

Is there any exit Load associated with investing in mid cap mutual funds?

Yes, almost all mid cap schemes charge with you an exit load of 1% while exiting the mutual fund before one year.