What happens when companies don’t keep their promises? Well, the market will punish such companies. And some of these companies will have unscrupulous management. Indeed, corporate governance is an area that affects many medium and small companies. Markets, again, severely punish such companies.
This is what makes investing in mid-cap companies difficult. Even as mutual fund investors, you cannot ignore these aspects of investing in mid-cap companies. You should invest in these schemes only if you have a very high risk tolerance. You should also have a long investment horizon of seven to 10 years. A longer investment horizon helps investors navigate volatility better.
If you’re convinced mid-cap plans are best for you, here are our recommended mid-cap plans. Please follow our monthly updates to find out how your plans are doing.
Best Mid Cap Mutual Funds to Invest in 2023:
- Axis Midcap Fund
- PGIM India Midcap Opportunities Fund
- Invesco India Midcap Fund
- Kotak Emerging Equity Fund
- Tata Midcap Growth Fund
ETMutualFunds has used the following parameters to list equity mutual fund schemes.
1. Average rolling returns: It has rolled over every day for the past three years.
2. Consistency over last three years: Hurst Exponent, H is used to calculate the consistency of a fund. The H exponent is a measure of the randomness of the fund’s NAV series. Funds with high H show lower volatility compared to funds with low H.
i) H = 0.5, the return series is said to be a geometric Brownian time series. This type of time series is difficult to predict.
iii) When H > 0.5, it is called continuous persistence. The larger the value of H, the stronger the trend of the series.
3. Adverse Risk: For this measure we have considered only the adverse returns of mutual fund schemes.
X = returns below zero
Y = sum of all squares of X
It is taken to calculate the ratio Z = Y/number of days
Low risk = square root of Z
4. Score: Measured by Jensen’s Alpha for the past three years. Jensen’s alpha represents the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the capital asset pricing model (CAPM). A high alpha indicates that the portfolio’s performance exceeds the market’s expected return.
Average returns under MF Scheme =
5. Asset size: For equity funds, the initial asset size is Rs 50 million.
(Disclaimer: Past performance is no guarantee of future performance.)