Best Mid Cap Mutual Funds to invest in 2020

Mid cap mutual funds invest in equities of mid-sized companies based on market capitalization and suited for long term investments. They have higher growth potential than large-cap companies and are less risky than small-cap companies.

Learn how Scripbox Recommends funds
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How does Scripbox rate funds?

Proprietary system to rate mutual funds

We use a proprietary system to rate mutual funds and based on that make a recommendation or rate the fund as top ranked.

We use a proprietary system to rate mutual funds and based on that make a recommendation or rate the fund as top ranked.

What Scripbox recommendations mean?

Scripbox algorithm recommends 2-4 funds for investment for an investment asset class such as large cap, diversified, liquid etc. When you invest for an objective, the algorithm suggests the appropriate asset class and funds.

Top Ranked

These funds are the top performers within a category of mutual funds considering a combination of criteria. The best amongst these funds are also labelled as Scripbox Recommended.

Scripbox algorithm classifies funds as "not recommended" when they perform poorly on a combination of criteria. These funds are usually the poorest performers within a category.

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Track Record

We look at consistent and long historical performance for our analysis

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Relative Size

We look at the size of the fund with respect to other funds in the category. Larger funds are preferred

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Category View

We check if the sub-category of the fund is recommended by us

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Consistency Of Performance

Consistency of performance over various tenures is analysed for a relative performance stack

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Track Record

We look at consistent and long historical performance for our analysis

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Relative Size

We look at the size of the fund with respect to other funds in the category. Larger funds are preferred

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Impact of Interest Rates

We check the relative interest rate risk of the sub-category of the fund. Lower the better

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Credit Quality Of Fund’s Portfolio

We check the relative interest rate risk of the sub-category of the fund. Lower the better

Equity Funds

Debt Funds

How to invest in best mutual funds?

Investing through Scripbox is made easy and paperless. All you need to do is follow the below steps and start investing.

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Choose a plan

Choose a plan to invest to start investing

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Invest online & transfer

Make instant payment or setup your investment for a later date

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Track your investments

Mutual fund companies allot you units and send confirmation via email & SMS. The same gets updated in your Scripbox Account

What are Best Mid Cap Mutual Funds?

What are the Mid Cap Mutual Funds?

All mid cap mutual funds invest at least 65% of their total assets in companies that rank between 101 and 250 based on market capitalization (midcap stocks). The best mid cap mutual funds strike a perfect balance between risk and return. They have higher growth potential than large cap companies and are less risky than small cap companies. Mid cap funds invest in midcap stocks that have the potential to grow into large cap companies. However, the tables may turn too.

Midcap companies cater to emerging markets of the economy and hence have a platform to grow. These companies are often underfollowed, under-researched, and therefore undervalued. Thus investment in midcap funds allows investors to earn potentially higher returns in the long run. Midcap companies can be highly sensitive to market fluctuations. Hence for optimal returns, investors are suggested to invest in the best midcap funds for longer horizons. Investing in equity schemes requires investors to stay invested for longer durations to overcome the effect of market fluctuations.

Best midcap funds are highly liquid, and investors can redeem their investment when necessary. Mid cap mutual funds best suit investors that are willing to invest for the long term and are not affected by short term fluctuations. Investors seeking high returns but ready to absorb more risk can invest in the top midcap funds. The best mid cap mutual funds to invest in 2020 are L&T Midcap Fund and Nippon India Growth Fund.

 

Features of Mid Cap Mutual Funds

Growth Potential

Mid cap mutual funds invest in mid-sized companies that have a high potential to grow. They are often undervalued and hence are excellent picks to earn higher returns.

Returns

Mid cap mutual funds give higher returns than large cap mutual funds in a bullish phase. They are highly responsive to opportunity and change.

Taxation

Mid cap mutual funds are taxed like any other equity fund. In the short term (within one year), the gains are subject to STCG tax of 15%. In the long term (after one year), the gains exceeding INR 1 lakh are subject to LTCG tax of 10%. Dividends are taxed and to be paid by investors at their income tax slab rate. Dividends above INR 5,000 are subject to TDS.

Risk

They are very vulnerable to business cycles and hence have a higher risk than large cap mutual funds. However, they have their business model in place and are less risky than small cap funds.

Diversification

Mid cap companies operate in emerging and niche markets. It allows investors to diversify their portfolio.

Liquidity

Best mid cap mutual funds are highly liquid, and investors can sell their units whenever they want.

Investment horizon

Mid cap mutual funds are highly volatile in the short term. These companies take time to grow and establish. Mid cap mutual funds tend to give higher returns in the long term (10 years plus).

 

How to invest in Top Performing Mutual Fund?

An investor can invest a lump sum one time or through SIP periodically. An investor can choose to invest lump sum one time if he has considerable corpus to invest for a longer-term. While SIP is a regular investment over a period of time. 

An investor can choose to invest monthly, quarterly, or half-yearly. SIP mutual funds are recommended for the first time mutual fund investors.

Investing through Scripbox is made easy and paperless. All you need to do is follow the below steps and start investing.

  • Choose a plan to invest to start investing
  • Set-up your investment account
  • Make instant payment or setup your investment for a later date
  • Money gets deducted from bank and gets transferred directly to mutual fund companies
  • Mutual fund companies allot you units and send confirmation via email & SMS. The same gets updated in your Scripbox Account
 

Taxability

Mid Cap Mutual Funds are taxed like equity schemes. The period before completion of one year from the date of investment is considered short term. If the investment is redeemed during the short term, the gains are subject to the STCG tax of 15% (plus 4% cess). Any period after the completion of one year from the date of investment is considered a long term. Any gains above INR 1,00,000 are subject to LTCG tax of 10% (plus 4% cess).

Effective from 1st April 2020, dividends are taxed in the hands of investors at the income tax slab rate. And dividends above INR 5,000 are subject to TDS of 10%. Equity mutual funds are subject to securities transaction tax of 0.001% if investors sell the units. Investors should take advantage of investing for longer horizons and earn higher returns and enjoy tax benefits.

 

How to invest in Mid Cap Mutual Funds?

Investment in midcap funds can be done either through Offline or Online technique.

Offline Investing: The mode of investing requires the investor to fill out all the details in the application form and submit the following documents with the asset management company (fund house):

1. Identity Proof

2. Cancelled Cheque 

3. Bank saving account details including account number, IFSC code and bank branch details.

4. Passport size photographs

5. Pan Card

6. KYC Documents (for KYC verification)

Offline investing can be done either through a broker or self. Brokers help in choosing the best-suited funds by assessing all the factors. For all those who aren't well versed with the markets can take the help of a broker to invest in the right set of funds.

Online Investing: investors can directly invest through the AMC's (fund house) website.  There are also multiple online platforms through which one can invest in mutual funds. Scripbox is one such platform that provides the top funds in the market for its investors. Scripbox algorithmically selects Mutual Funds and does an annual review of funds to ensure the fund's performance and investor goals are on track. 

 

Best Mid Cap Mutual Fund

Below are the Scripbox recommended top performing mid cap mutual funds for the long term to invest in 2020:

Fund Name
L&T Mid Cap Fund
Nippon India Growth Fund

Scripbox's algorithm picks funds that have a consistent track record. In addition to various other factors, the algorithm performs rigorous data analytics to identify the top-performing fund for investors. Scripbox designed investment plan ensures that investors reach their goal. The approach that Scripbox follows is:

Comprehensive planning to create a personalized financial plan

Option to choose investment style and tweak it along the way

Tracking the goal progress and suggesting a necessary alternative to be on track 

 

Scripbox mutual fund calculator

Scripbox's Investment Calculator helps in understanding the return investment can generate over a period of time. Let's take an example of Mr Surya, who wishes to start a mutual fund SIP investment in the best Mid Cap Fund. By reviewing the Scripbox's recommended best mid cap mutual fund, he decides to invest in the L&T Mid Cap Fund. Using the investment calculator, we can calculate the total corpus that can be created by investing for the selected investment duration.

1. Visit the fund's page on Scripbox.

2. Select the Monthly SIP option

3. Enter the SIP investment Amount (INR 15,000)

4. Select a suitable tenure (10 years)

5. Revise the return percentage (expected SIP returns) as per estimation

6. Select Step-up % in case you want to increase investment each year

Mr Surya's investment of INR 18,00,000 for ten years invested at 12% per annum (expected SIP returns) would earn a total corpus of INR 34,85,086. The wealth gained by Mr Surya is INR 16,85,086.

In the same investment scenario, Mr Surya opted for a 10% step-up each year. The total corpus at the end of the tenure would be INR 50,61,489.

The calculator also helps in understanding how much needs to be invested in case an investor has a target investment amount that they wish to achieve at the end of tenure. Mr Anand wants to save INR 50,00,000 at the end of 10 years. Mr Anand can achieve this target by doing a monthly mutual fund SIP of INR 21,600.

Investing through Scripbox can be done either through SIP or lump sum, as per the fund's offering. Additionally, Scripbox's SIP calculator helps in determining SIP returns from an investment.

Frequently asked questions

Which is better mid cap or small cap?

Mid cap companies have a high potential to grow and become large cap companies. They have a business model in place. They give higher returns than large cap companies in the bullish phase but are vulnerable to a falling market. However, they are less risky than small cap companies.

Small cap companies have a higher growth potential. They are just entering the market and hence very young and seek to expand aggressively. They are the riskiest companies as they are highly vulnerable to market cycles. However, in the bullish phase, they perform exceptionally well in the market.

One cannot say which is better from an investment perspective. All industries follow a business cycle, and no industry or company is always in the growth phase. However, investing in large caps is considered safest, followed by mid caps and then small caps. It depends on the investor's needs and profiles to know which is the best fit for him/her. A risk-averse investor should reconsider investing in small and mid caps. 

Which is the best midcap mutual fund?

The best mid cap mutual funds to invest in 2020 are Nippon India Growth Fund and L&T Midcap Fund.

What does mid cap mean?

Mid cap companies are companies that rank between 101 and 250 based on market capitalization. Mid cap companies have a high potential to grow and become large cap companies. They have a business model in place. Their growth is higher than large cap companies in the bullish phase. They are less risky than small cap companies.

These companies are highly responsive to opportunity and change and vulnerable to business cycles. Best mid cap mutual funds have an asset allocation that invests at least 65% of their total assets in mid cap companies. 

Are mid caps a good investment?

An investment is considered good if it meets the investor's needs and requirements. Mid cap mutual funds best suit investors that are willing to invest for the long term and are not affected by short term fluctuations. Mid cap funds are one of the equity mutual fund types. Investors seeking high returns but willing to absorb more risk should invest in the top midcap funds.

Mid cap mutual funds invest in equities of companies that rank between 101 and 250 based on market capitalization. Their high growth potential generates higher returns than large cap mutual funds in the bullish phase. During a bear market phase, even the top funds might lose substantial value as investors prefer safer options. They are less risky than small cap funds. The best mid cap mutual funds are suited for long term investments.

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