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| Capitalstars Investment Advisor |
Though the mid-cap category has been going through a bad phase in the last few years, many mutual fund managers believe that the category may be in for a comeback in the coming months.
We are keeping HDFC Mid-Cap Opportunities Fund under watch. As per our methodology, the scheme has been in the last quartile for over six months now. We will continue to watch the performance of the scheme and update you on its performance.
Here is our mid-cap mutual fund recommendation list for 2020. We are continuing with the same schemes that we have recommended last year. You may continue with your investments in them and make fresh allocations to them, too. However, we are keeping a close watch on HDFC Mid-Cap Opportunities Fund. As per our methodology, the scheme has been in the last quartile for over six months now. We will continue to watch the performance of the scheme and update you on its performance.
Though the mid-cap category has been going through a bad phase in the last few years, many mutual fund managers believe that the category may be in for a comeback in the coming months. Currently, the mid-cap mutual fund category is offering 5.11% returns in the last one year. The category has given 8.55% returns in three years and 8.20% returns in five years.
If you are new to these recommendations, here are a few things you should understand before considering to invest in mid cap mutual funds to meet your long-term financial goals. Mid cap mutual funds invest mostly in mid cap stocks or stocks of mid-sized companies. These companies could become a successful large company. If that happens, you will make money.
However, many mid-sized companies never before fulfill their promise. In fact, many of them get into trouble because of dubious management practices and lack of vision. This is the risk you are taking while investing in mid cap stocks. When the company hits a rough patch, the stock tanks and it may take a very long time to bounce back or it may never regain its glory. When a company faces these phases, its stocks may tank heavily.
This is the reason why mid cap stocks are considered extremely risky and volatile. That is the reason why these schemes are recommended only to the investor with a very large appetite and ability to cope with volatility. Advisors also say investors should invest in mid cap schemes only if they have a very long horizon.
Best large-cap mutual funds to invest in 2020
To conclude, if you have a very high-risk appetite and can invest for a long-term horizon of seven to 10 years, you can invest in mid-cap mutual fund schemes. We have handpicked five mid cap equity mutual fund schemes that you may consider to invest to achieve your long-term financial goals.
Best mid cap mutual fund schemes to invest in 2020
L&T Midcap Fund
HDFC Mid-Cap Opportunities Fund
DSP Midcap Fund
Invesco India Midcap fund
Axis Midcap Fund
Here is our methodology:
ET.com Mutual Funds has employed the following parameters for shortlisting the equity mutual fund schemes.
1. Mean rolling returns: Rolled daily for the last three years.
2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of the NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H.
3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure.
4. Outperformance: It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market.
5. Asset size: For Equity funds, the threshold asset size is Rs 50 crore
We will be happy to help you to select your mutual fund plan. Get more details here: Mcx Tips, Derivative-Free Trial, Stock tips Call on:9977499927
Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927
Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
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