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Mid Cap Funds

Mid cap funds are those mutual funds, which invest in small / medium sized companies. As there is no standard meaning classifying companies as small or medium, each mutual fund has its own classification for small and medium sized companies. Usually, companies with a market capitalization of up to Rs 500 crore are classified as small. Those companies have a market capitalization between Rs 500 crore and Rs 1,000 crore are classified as medium sized.

Big investors like mutual funds and Foreign Institutional Investors are increasingly investing in mid caps currently because the price of large caps has increased substantially. Small / mid sized companies tend to be under researched consequently they present an opportunity to invest in a company that is yet to be identified by the market. Such companies offer higher growth potential going forward and consequently an opportunity to benefit from higher than average valuations.

Mid cap companies are looked upon as wealth creators and have the potential to join the league of large cap companies. Such companies are nimble, flexible and can adapt to the changes faster. One of the challenges that fund managers of mid cap funds face is to identifying such companies. But mid cap funds are very volatile and tend to fall like a pack of cards in bad times. Therefore, caution should be exercised while investing in mid cap mutual funds. Mid cap funds are a good option in case the investor wants to add some diversity to his portfolio.

Top Mid Cap Funds in India

Mid-cap funds are a special type of mutual fund wherein, the corpus accumulated is invested in small or medium sized companies. With the rise of large caps the heavy weight investors like the mutual funds and Foreign Institutional Investors are increasingly investing in mid cap funds. The economic renaissance earnest during the early 1990s in India, witnessed increased economic activity in the Indian financial market. The Indian financial market and its authoritarian also matured with the incremental growth of the said market.

  • Sundaram BNP Paribas Select Midcap
  • Franklin India Prima Fund
  • HDFC Capital Builder
  • Kotak Indian Mid Cap Fund
  • HSBC Midcap Equity Fund