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New Delhi: Mutual fund investors are working to diversify their portfolios. A look at the Association of Mutual Funds of India (AMFI) data shows that investors are opting for flexi cap and mid-cap funds to expand their portfolios, which until now were dominated by large cap and small cap mutual funds.
Data from the Association of Mutual Funds in India (AMFI) shows that Flexi Cap mutual funds remained at the top, with investments rising from Rs 7,029 crore in September this year to Rs 8,929 crore in October. Investment in mid-cap mutual funds stood at Rs 3,807 crore, which is the second highest among all equity funds. Net investment in Equity Mutual Funds has declined by about 19%. Large-cap and smallcap funds have suffered the most in equity mutual funds, because investors are preferring to invest in flexicap and mid-cap mutual funds.
Although Flexi Cap Mutual Funds continue to dominate, people are increasingly interested in the mid-cap mutual fund category. Since mid-caps are also part of the Flexi Cap portfolio, market analysts believe that this category is at the forefront for its performance. Over the last three years, the Nippon India Growth Midcap Fund has given an impressive return of 25.13% at a time when most of the equity funds are lagging. In the same period, UTI Midcap Fund and DSP Midcap Fund have given returns of 21.22% and 18.44% respectively. Interestingly, in the last three years, out of 35 mid-cap funds from various AMCs, only five mid-cap funds have given returns below 20%, and the lowest returns have been above 15%, indicating the solid performance of the mid-cap fund category.
Take the Nippon India Growth Mid Cap Fund, which was launched more than 30 years ago. This fund has given returns at an impressive CAGR of 22.28% since its inception. This fund invests in companies that provide above-average growth and have the potential to deliver good returns over time. The reason for the success of this fund is a streamlined investment process, rigorous risk management and thorough research. In comparison, the Franklin Mid Cap Fund, which completed 33 years on December 1, has given a return of 19.21% since its inception. Mid cap funds are ideal for long-term investments and because they prioritize capital growth, investors get a steady increase in the value of the investment over time. In addition, mid-cap funds facilitate diversification into different sectors, which helps in reducing risk.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold, silver and crypto assets.)
