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.

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.