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An Overview of Mid and Small Cap Funds and the Best Players in the Market

Mutual fundSmall & Mid Cap Equity Fundss that have their corpus diversely invested across small and medium capitalisation companies are referred to as mid and small cap funds. And in what proportion the corpus remains allocated between these two types of companies vary from fund to fund.

The money in such funds remains parked in a mixture of small cap and mid cap stocks. And since these funds are exposed to high beta stocks, they are located on a high risk return trade-off plane, which is not the case with large cap funds.

Mid and small cap funds should be considered an important or inevitable part of a long-term portfolio. These funds have the potential to provide great returns against your investments. Small companies have higher growth opportunities than their larger counterparts. And that is the reason why smaller companies often outdo bigger ones when it comes to portfolio performance.

If you are interested in investing in small and medium capitalisation companies, then mutual funds are the best way to do so, because they remain diversified across different ventures. This is important to prevent yourself from market risks. Yes, such funds have asset values that display higher volatility than large cap funds in the long run, but they have the potential to stand as better performers.

When it comes to mid and small cap funds, there is simply no shortage of options in the market. But the product/s you actually choose for investment should be in accordance with your monetary goals and other financial preferences. Below you find a list of the top ten mid and small cap funds in the market you can choose from for investment. Check out-

Mid Small Cap Equity Funds

Source: Swaraj Wealth Research

The top performing mid and small cap fund is Edelweiss Mid and Small Cap Fund- Regular Plan- Growth Option, which has an asset of INR 477.34 crores under management. This scheme which was launched on 26-12-2007 gave a since-launch return of 39.88%.

The second in the list is L & T Emerging Businesses Fund- Regular Plan-Growth, which came into existence on 12-05-2014. The scheme, having and AUM of INR 1873 crores, offered a return of 32.71% since its advent.

The third best performer is ICICI Prudential Midcap Select iWIN ETF, having an AUM of 2.05 crores. It gave a return of 31.61% since it came into existence on the 29th of June 2016.

The fourth in the queue is Principal Emerging Bluechip Fund- Growth Option, with an asset value of INR 1266.69 crores. This scheme launched on 12-11-2008, gave a return of 30.22% since its advent.

Sundaram Select Midcap-Growth is the fifth in the list with an asset of INR 5664 crores under management. The scheme offered a return of 29.51% since its launch on 30-07-2002.

The sixth best performer in this category is MOSt Focused Midcap 30-Regular Plan-Growth Option, launched on 24-02-2014. This scheme has a total asset of INR 1342.62 crores under management and offers a since-launch return of 29.50%.

Aditya Birla Sun Life MIDCAP Fund-Growth is the seventh top performer, and has an asset of INR 2231.69 crores under management. This scheme gave a return of 25.79% since it came into being on the 3rd of October, 2002.

The eighth top performing scheme is Mirae Asset Emerging Bluechip Fund-Regular Plan-Growth Option, having an AUM of INR 4428 crores. It offered a return percentage of 24.68 ever since it came into existence on the 9th of July, 2010.

The second last in the list i.e. Reliance growth Fund -Growth Plan-Growth Option marked a return of 23.94% since its advent on 08-10-1995. This Reliance scheme has an asset of INR 6612.80 crores under management.

The last in the list is SBI Small & Midcap- Regular Plan- Growth launched on the 9th of September, 2009. Having an asset of INR 762 crores, this scheme gave a return of 23.73% since launch.

You should keep a few important things in mind before selecting a mid and small cap fund. The first thing you need to factor in is that the chances of making a wrong investment choice in this category is higher, considering the fact that the universe of such stocks is bigger. And that is why you should choose a fund based on the reputation and skills of the fund manager. But because different fund managers use different parameters and filters to select stocks for investment, the best practice is to opt for multiple funds for your portfolio.