New Delhi. Mutual fund investors have now made a major change in their plans. Now they neither bet on big companies nor on small companies. Still they have been making continuous profits. The Association of Mutual Funds in India (AMFI) has released data and said that investors are now showing more confidence in mid-cap companies. Apart from this, flexi cap funds are also becoming the first choice of investors.
Association of Mutual Funds in India (AMFI) has said that mutual fund investors are busy in diversifying their portfolio. A look at the data shows that investors are opting for flexi cap and mid cap funds to expand their portfolio, which till now was dominated by large cap and small cap mutual funds.
What do the statistics say?
Amfi data shows that flexi cap mutual funds remained at the top in terms of attracting investments. Investment in this increased from Rs 7,029 crore in September this year to Rs 8,929 crore in October. Investment in midcap mutual funds stood at Rs 3,807 crore, which is the second highest among all equity funds. The net investment of equity mutual funds has declined by about 19%. Among equity mutual funds, the biggest loss has been suffered by largecap and smallcap funds, because investors are preferring to invest in flexicap and midcap mutual funds.
Flexi cap fund dominance
AMFI data clearly shows that flexi cap mutual funds continue to dominate, but people’s interest in the mid cap mutual fund category is increasing. Since midcaps are also part of the flexi cap portfolio, market analysts believe that this category is at the forefront for its performance. Investors have also increased their investment in this category the most in recent times.
Who gave more returns
Nippon India Growth Midcap Fund has given an impressive return of 25.13% in the last three years. At a time when most equity funds are lagging. Over the same period, UTI Midcap Fund and DSP Midcap Fund have given returns of 21.22% and 18.44% respectively. Interestingly, out of 35 midcap funds from various AMCs in the last three years, only five midcap funds have given returns below 20% and the lowest has returned above 15%, indicating a solid performance of the midcap fund category.
How mid cap performance
Take Nippon India Growth Mid Cap Fund, which was launched more than 30 years ago. This fund has given returns at an impressive CAGR rate of 22.28% since its inception. This fund invests in companies that deliver above average growth and have the potential to deliver good returns over time. The success of this fund is due to a well-defined investment process, rigorous risk management and thorough research. In comparison, Franklin Mid Cap Fund, which completed 33 years on December 1, has given returns of 19.21% since its inception.
Why mid caps are preferred
Mid cap funds are ideal for long-term investments and since they prioritize capital growth, investors get steady growth in the value of investments over time. Additionally, mid cap funds facilitate diversification across sectors, which helps in reducing risk. This is the reason why investors who want to invest their money for the long term look only towards midcaps for stable returns.
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