If you want to put your money in the market for a period of 5 to 10 years, mid cap mutual funds may be the right choice to give you a balance of growth and safety. These funds are investing in such companies that have a good track record but still have a lot of space to grow, thus they become the perfect ones for the creation of wealth in the long run.
In the guide, we explore the 5, 10 year period best mid cap mutual funds, how to decide the right fund, returns to expect, risks involved, and clever investment strategies.
What are Mid Cap Mutual Funds?
Mid cap mutual funds buy the shares of medium, sized companies (market capitalization ranking around 101250) that have already moved past the development stage but are aggressively growing.
Key Characteristics:
Longer, term growth potential is higher than large, cap fundsVolatility is lower than small, cap fundsThey are perfect for long, term investors (510 years)Good for SIP, based investingReasons why mid cap funds make the best use of 510 years.
Mid cap equities usually give a better performance than large caps over longer periods, at the same time, being less volatile than small caps. A 510 year investment horizon provides investors with the opportunity to overlook market fluctuations and get profits from the power of compounding.
They are best suited to those investors who want:
Capital growth in the long runRisk exposure ranging from moderate to highDiversification of the portfolio away from large capsTop Mid Cap Mutual Funds for 510 Years (India)
Below are some of the consistently managed and top, performing mid, cap mutual funds that you can hold for the long term:
1. Nippon India Growth Fund (Mid Cap)
Long, term performance track record is strongA well, diversified mid cap portfolioBoth SIP and lump sum investments are allowable
2.HDFC Mid, Cap Opportunities Fund
One of the most trusted and oldest mid, cap funds.Focus on quality mid, sized companies.Good downside protection during market corrections.
3. Kotak Emerging Equity Fund
Balanced approach between growth and risk management.Consistent returns over long periods.Popular among long, term SIP investors.
4. Axis Midcap Fund
Focuses on high, quality businesses.Relatively lower volatility compared to peers.Ideal for conservative mid cap exposure.
5. Motilal Oswal Midcap Fund
Concentrated, high, conviction portfolio.Suited to investors with higher risk tolerance.Strong long, term return potential.
Expected Returns from Mid Cap Funds (510 Years)Mid cap mutual funds have returned annually on average 14 to 18% over the past 5 years. Over the 10 years period, the annualized return is around 16 to 20% (in strong market cycles). Past performance does not guarantee future returns.
SIP vs Lump Sum: Whats Better for Mid Cap Funds?
SIP (Recommended)
Reduces timing riskSmoothens volatilityIdeal for salaried investorsWorks best for 510 year goals Lump Sum
Suitable during market correctionsHigher short, term riskRequires strong market timing Expert tip: SIP is generally the safer and smarter choice for mid cap investing.
Risks You Should Know
Mid cap funds are more volatile than large capsShort, term underperformance is possibleRequires patience and long, term disciplineHowever, these risks become quite small with a 510 year horizon.
How to Choose the Best Mid Cap Mutual Fund
Before investing, make sure to check:
Consistency of returns (5+ years)Expense ratio (lower is better)Fund manager track recordPortfolio diversificationRisk, adjusted returns (Sharpe ratio)
Who Should Invest in Mid Cap Mutual Funds?
Mid cap funds are good for:
Investors aged 25-45
Long, term wealth creators
Investors with a moderate to high risk appetite
SIP investors planning for goals such as home purchase, childrens education, or retirement
Final Verdict
Mid cap mutual funds could be a top equity investment choice in India if you have a 510 year investment horizon. They provide substantial growth potential without the harsh volatility of small caps.
Best Picks to Consider:
Nippon India Growth Fund
HDFC Mid, Cap Opportunities Fund
Kotak Emerging Equity Fund
Axis Midcap Fund
Motilal Oswal Midcap Fund
Ready to Start Investing?
Start a SIP with just 500/month
Check up on performance once a year
Keep your money invested during market rises and falls
