Mid-Cap Mutual Funds are the invested in equity or equity related products in Mid Or medium companies whose ranks from 101 to 250 among the market capitalization. As the name itself says that these funds fall between the large-cap and small-cap companies. The funds are comparatively less volatile than large-cap funds and more stable than small-cap funds. Before, choosing Mid-Cap fund an investor should check for some point like the market capitalization, risk management, fund manager, etc., so the investor can profit more returns.
What are the features of Mid-Cap Mutual Funds?
Check the History of the investment Company: Evaluate the market performance of the investment company, the market capitalization history helps you know the company's profile, which makes the investor to make good decision before investing in the mutual funds.
According to Securities and Exchange Board of India (SEBI), the expense ratio is 2.50%, Mid-Cap mutual funds and the expense ratio are inversely proportional, the lower the expense ratio higher the returns and vice versa.
Age and returns go hand in hand:
Apparently these Mutual funds offers higher compounding interests, but it is well known to gain returns it needs time, the more the investment time the more the compounding benefits. So, it is recommended to invest as young so there will be a great long time to profit the maturity returns. Depending upon the age the investor must make decision and go for the suitable investment option.
Know about the Fund Manager:
The fund manager is the one who makes decision about the funds, so the investor should check for the experience and track record of the fund manager, of the manager fails to take good decision, the investor will also have to face the consequences.
Check the risk factor:
Every Equity fund and it's types will have different range of risks, investor has to check and decide up to which level the investor can bare and withstand.
Advantages of Mid-Cap Mutual Funds:
• Less volatile
• Dividend reinvestment
• Less Risk
• Fair pricing, etc.
Disadvantages of Mid-Cap Mutual Funds:
• High fees