Before making an investment into a mutual fund, investors tend to discern the historical returns posted by that particular scheme and at times, compare them with those of the rivals.
There are a number of factors that are weighed by investors before they opt for a fund scheme and a fund house. These factors include the reputation of fund house, past records of fund manager, category of fund scheme, and so on.
However, historical returns are often given disproportionately high consideration by investors before they zero in on a mutual fund scheme.
Here we shortlist the mid-cap mutual fund schemes that have given a CAGR return of more than 19 percent. But at the outset, we explain what exactly are mid-cap funds.
What are mid-cap funds?
Mid-cap mutual funds are the equity funds that primarily invest in equities and equity-related instruments. These funds invest at least 65 percent investment in mid-cap stocks.
They seek long term growth but could be volatile in the short term. They are suitable for investors with higher risk appetite and longer investment horizon.
There are a total of 29 mid-cap schemes with a total AUM of ₹1,83,246 crore as on February 28, 2023, shows the AMFI (Association of Mutual Funds in India) data.
In the month of February, these schemes saw a net inflow of ₹1,816 crore against ₹1,628 crore in the previous month, the data reveals.
Here we shortlist the mid-cap fund schemes which have delivered a compound annual growth rate (CAGR) return of 19 percent in the past 10 years.
To put this figure in the right perspective — if someone had made an investment of ₹1 lakh 10 years ago, a CAGR would have enabled the investment to grow to ₹5,69,468.
Also, if someone had invested an SIP of ₹10,000 for 10 years, one would have accumulated ₹35,84,574 by investing ₹12,00,000.
|Mid cap funds||10-year-returns (%)|
|Edelweiss Mid Cap Fund||19.76|
|HDFC Mid-Cap Opportunities Fund||19.18|
|Kotak Emerging Equity Fund||19.84|
|SBI Magnum Midcap Fund||19.25|
|UTI Mid Cap Fund||19.03|
(Source: AMFI, 10-year-returns as on March 1, 2023)
As we can see in the table above, Edelweiss mid cap fund gave 19.76 percent CAGR return, HDFC Mid-Cap Opportunities Fund delivered annual returns of 19.18 percent, Kotak Emerging Equity Fund gave 19.84 percent annual returns in the past 10 years.
SBI Magnum Midcap Fund gave 19.25 percent returns, and UTI Mid Cap Fund gave 19.03 percent returns.
However, investors must be aware of the fact that high historical returns do not assure similarly high returns in the future as well.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.