Midcap funds in India are equity mutual funds that park their money in the stocks of mid-sized companies in the country. As per the Securities and Exchange Board of India (SEBI), companies ranked between 101 and 250 based on their market capitalization are classified as midcap companies.
It takes at least five years or more for the returns on these investments to be palpable. This is because these funds tend to be more affected in the event of a downturn when compared to their large-cap peers. You can invest through both lump sum and systematic investment plans (SIPs) in these types of mutual funds. One such example is the Quant Mid Cap Fund Growth.
Quant Mid Cap Fund Growth
As of February 28, 2022, this fund holds assets under management to the tune of ₹283.09 crore. Launched on March 09, 2021, this open-ended mutual fund comes with a very high-risk factor. The fund is benchmarked against the NIFTY Midcap 150 Total Return Index and can be bought with the view to earning long-term returns. This fund charges an expense ratio of 2.62 per cent, which is a bit higher compared to other midcap funds in this category. The minimum amount you can invest in this fund is ₹5000 in a lump sum while you can make an added minimum investment of ₹1000 in a lump sum in this fund. The minimum investment you can make through SIPs is ₹1000. The exit load is 0.50 per cent if redeemed within three months.
This fund is made up of 98.15 per cent investment in equities and 1.85 per cent in cash and cash equivalents. No part of this fund is invested in debt instruments. The management relies more on the value investing style and hence puts a major part of its money in large-cap and mid-cap companies in India. Only 2.4 per cent of the fund’s money is invested in the country’s small-cap companies.
While the top equity holdings make up 62.50 per cent of the fund’s total assets, nearly 56.54 per cent of the fund’s assets are selected from among the top three sectors in the economy.
The returns factor
The scheme has earned more than 40 per cent returns in a year while the absolute returns over five years are 163.46 per cent. Since its inception, the returns on this fund have earned 12.79 per cent returns while the absolute yield is 1170.53 per cent.
|Investment Period||Absolute Returns (in %)||Annualized Returns (in %)|
- If the units of this fund are redeemed within a year of investment, the gains from this fund are subject to short-term capital gain tax (STCG), i.e., 15 per cent.
- Long-term investors redeeming their investments after one year will be exempted from tax on gains up to ₹1 lakh. More than ₹1 lakh gains would be subject to long-term capital gains tax, i.e., 10 per cent.
- The dividend income from this fund gets added to the income of the investor and is taxed as per the then income tax slab.
- The fund house shall deduct a TDS of 10 per cent on dividends exceeding ₹5000 in any financial year.
Note: This article is for educational purposes only. Please speak to your investment advisor before investing.