Mid Cap funds are the future market leaders. While large cap funds have an average market cap of above Rs. 10000 crore, mid caps have an average market caps between Rs. 5,000 and Rs. 10,000 crore. These are the next 200 stocks that follow large caps.
Mid caps have a stronger wealth bearing potential as compared to large caps; they typically perform better than the latter in bullish markets. Since these funds are riskier than large caps, the scope for growth is much more with mid caps. However, in a bearish market or when the market is going down, mid caps lose more in value as compared to the relatively safer large caps.
Let us look at the top 5 mid cap funds that you should invest or stay invested in 2018
- Aditya Birla Sun Life Pure Value Fund – This equity mid cap fund has had a phenomenal run in the past five years. Launched in 2008, Birla Sun Life Pure Value Fund has given 56.41 percent return in 1 year, 21.28 percent per annum in 3 years and 30.18 percent per annum in the past 5 years. The expense ratio for the fund is 2.39 percent. The AUM size of the fund is Rs. 2300 crore. The Fund has proved to be an ideal fund in both phases of the market, 2011 downside where it contained losses at 24 percent, with the benchmark falling by 27 percent. During the bullish phase, the fund outpaced almost all of its peers behind. 85 to 90 percent of the corpus is invested in equities, while the rest is in debt. Mahesh Patil and Milind Bafna, the two fund managers are credited in making sure that the fund adheres to its fundamentals.
- Mirae Asset Emerging Bluechip Fund – The fund has had a glorious run for the past five years. The fund was launched on July 09, 2010 and has delivered 24.94 percent since launch. It has given 51.07 percent return in the past 1 year, 24.45 percent per annum in the past 3 years and 31.05 per annum in the past five years. The expense ratio for the fund is 2.4 percent. The AUM size of the fund is Rs. 5031 crore. The top five sectoral holdings include financial, services, energy, healthcare and chemicals. The fund looks out for businesses with good growth prospects and returns on ROCE (Return on Capital Employed). No doubt, under the fund manager Neelesh Surana, the fund has been a top performer but the fund has to yet brave a 2008-like financial crisis.
- HDFC Mid Cap Opportunities Fund – Launched on June 25, 2007, the fund has delivered 43.27 percent, 19.28 percent and 26.64 percent return per annum in the past 1, 3 and 5 years. The expense ratio of the fund is 2.11 percent. Since its launch, HDFC Mid Cap Opportunities Fund has delivered 18.85 percent returns. The top five sectors the fund invests in are financial, engineering, FMCG, healthcare and technology. The fund manager Chirag Setalvad has been associated with the fund since 2007. The hallmark of the fund has been consistency throughout the years. It has about 75 percent of the corpus typically vested in mid cap companies, while the rest of it is in large caps. So, if you are looking for a consistent performer for mid caps, this is your bet.
- DSP BlackRock Small and Mid Cap Fund – The fund was launched on November 14, 2005. The fund has delivered 41.61 percent, 19.27 percent and 24.05 percent returns er annum in the past 1, 3 and 5 years. The expense ratio of the fund is 2.53 percent. DSP BlackRock Small and Mid Cap Fund has delivered 17.13 percent return per annum since its launch. The fund manager Vinit Sambre, adopts a bottom up approach and looks out for companies with visible growth. He also goes for out of demand companies which have strong intrinsic growth.
- Franklin India Smaller Companies Fund – Since its launched on October 28, 2004, the fund has delivered 16.67 percent returns per annum. Over a period of 1, 3 and 5 years, the fund has delivered 45.38 percent, 20.9 percent and 30.54 percent return per annum. The expense ratio of the fund is 2.44 percent. At this point, the top 5 sectors the fund invests in are financial, construction, engineering, chemicals and services. The fund managers Hari Shyamsunder, R Janakiraman and Srikesh Nair have done a good job in positioning Franklin India Smaller Companies Fund as one of the top five mid cap funds in the horizon.