Every person these days want to invest money at a place where their hard earned money is not only secured but also is earning good amount of return over it. A safe and sound investment helps you to secure your future. It helps to maintain corpus of funds to overcome the unforeseen situation. Every person desires to extend its family for which a proper investment is needed to support such dream.
WHAT IS A MID CAP COMPANY?
Mid Cap company is the one that undergoes medium market capitalization. Cap word here means market capitalization. This is the whole value of the company. These days people are keen to make investment in med cap companies. The people who invest in mid cap companies are likely to earn higher returns in long run.
The mid cap company falls in the middle of small and large cap company limit. The size of the company often depicts that how safe the investment is! It gives a clue about the size of return and risk involved on the investment. A Mid Cap Company is basically the one which has 500-10000 crores of paid up capital.
Mid cap companies are becoming the active choice of various financial investors and financial investment institutions (often called FII’s). If a company undergoes a good corporate and business strategy, take right decisions at right time, it will eventually help a mid cap company earn high profits.
WHY MID-CAP COMPANY SHOULD BE YOUR FIRST CHOICE?
Various reasons make mid cap company first choice for the investors:
- Mid cap company have higher potential to make profit than large cap company
- Mid cap company works well in bullish trend where the market is upswing for long.
- Mid cap companies are known for their quick adaptability feature, that is, they absorb the new advanced technologies more faster than the large cap company
- Mid Cap Company have less volatility than large cap company.
- Mid cap company has the potential to grow faster than large cap company which makes it the first choice for the investors!
ADVANTAGES OF MID CAP COMPANY
Mid cap companies allow you to make investment in the companies that have high possibility of growth in the near future. Some of the key advantages are discussed below:
- Mid-cap shares lie on a broad spectrum, bordering both small-cap and large-cap stocks. These shares vary in terms of returns and risks entailed.
- It helps in long term wealth creation
- Investment made in SIP or Systematic Investment Planning helps to make the habit of continuous constant investment.
- The mid cap companies have lower risk when compared to small cap companies
- The return yield by mid cap company is generally higher than the large cap company
- Some mid cap companies trade in niche market and hence allows you to diversify the portfolio investment
- Mid cap company are highly volatile
- Mid cap company helps to earn a good average return
- The mid cap companies make considerable information disclosure that makes it more preferable over small or large cap companies
REQUIREMENTS TO INVESTMENT IN A MID CAP COMPANY
One just need a Demat account to start trading in the mid cap company. Over the years, trading has become much easier. SEBI has come up with various guidelines and initiative in order to boost the confidence of the people in stock market.
TOP 10 MID CAP COMPANY OF 2020
1. AXIS MID CAP FUND DIRECT GROWTH
The return yield by this fund is up to 9.98% annually continuously since past 3 years which is quite high. Last year the annual return was 14.19% which is phenomenal. This mid cap fund is hitting new records every year and should be the first choice of the investors.
This company is known for its reputation and consistent results over the past few years. Earning an annual return of 14.19% is not less!
The company is ranked 41 in the mid cap sector. You need to make a minimum invest of Rs. 5000 to be the part of axis family. The SIP investment starts from Rs. 500.
2. DSP BLACKROCK MID CAP COMPANY
DSP BLACKROCK COMPANY was launched back in 29006. This company involves a bit higher level of risk. Since its launch, the company is capable of capturing the average annual return of Rs. 13.5% which is commendable!
The basic objectives of the company to make such portfolio that can earn the company higher return in the long run. Company was ranked at 20th position in the mid cap company category. It earned the annual return of 39.8% in 2017.
3. TAURUS DISCOVERY MID CAP FUND DIRECT GROWTH
This company is successful in hitting new benchmark in past few years. The company is found earning the average annualized return of 2.92% in last three years. In the year 2019, the annual return of the company was 16.59%.
The company is trying to make it position strong in the market since past few years. To be the part of the company, one need to make a lump sum investment of Rs. 5000 or a simple SIP can be done starting from just Rs. 1000.
4. L&T MID CAP FUND DIRECT GROWTH
The company is able to outperform other strong companies in the past few years. The company was able to earn an annualized return in 2019 of 3.93% which is commendable. Company is constantly working on hitting the new records.
The company is ranked 05 in the mid cap sector. Minimum lump sum investment required to be the part of the big L&T family is just Rs.5000 and SIP begins at just Rs. 500.
5. KOTAK EMERGING EQUITY SCHEME
The company has the basic objective of earning high constant profits in long run by investing in the portfolio of small and mid cap companies.
The company is able to give a constant return of 10.4% annualized return since its launch back on 30th March 2007. The company is relatively higher risk. In 2017 the annual return of the company hit the all time high of 43%. While back in 2019 the annualized return of the company was 8.9% which is amazing!
The company is ranked 12 in the mid cap sector. The minimum lump sum investment required in the company is of Rs 5000 and to start SIP, it just requires the investment of Rs. 1000.
6. TATA MID CAP GROWTH DIRECT PLAN
The company is able to grab the average annualized return in the past few years of 1.08%. The company is able to hit the benchmark of the equity company constantly. The company provide income distribution and/or medium return in the mid cap sector.
The company was able to grab the return of 49.8% which was all time high back in 2017. The company is ranked 31 in the mid cap sector. The lump sum investment required is of Rs. 5000 and to start SIP, it just requires the investment of Rs. 500.
7. EDELWEISS MID CAP DIRECT PLAN GROWTH
The company is successful in giving the average annualized return in the past few years of 1.52%. The company was launched back on 26 December 2007 and is successful in giving the average return of 7.8% since its launch that is outstanding. In 2017, the company hit the all time high of 52.3%. While back in 2019 the annualized return of the company was 5.2%.
The company is ranked 22 in the mid cap sector. The lump sum investment required is of Rs. 5000 and to start SIP, it just requires the investment of Rs. 500.
8. FRANKLIN INDIA PRIMA FUND
The major focus of the company is to earn medium to long term capital appreciation. The company is successful of capturing the average annualized return in the past 3 years of -1.61%. The company was launched back on 01 December 1993 and is successful in giving the average return of 18.1% since its launch which is commendable.
In 2017, the company hit the all time high of 39.7%. While back in 2019 the annualized return of the company was 3.5%
The company is ranked 29 in the mid cap sector. The lump sum investment required is of Rs. 5000 and to start SIP, it just requires the investment of Rs. 500.
9. BNP PARIBAS MID CAP DIRECT GROWTH
The company is able to outperform other strong companies in the past few years. The average return yield by this fund is up to -0.12% annually since past 3 years. The company was launched back on 02 May 2006 and is successful in giving the average return of 8.4% since its launch which is remarkable!
In 2017, the company hit the all time high of 49%. While back in 2019 the annualized return of the company was 5.2%
The company is ranked 18 in the mid cap sector. The lump sum investment required is of Rs. 5000 and to start SIP, it just requires the investment of Rs. 300.
The company is simply successful in outperforming similar companies in the market. The company is constantly hitting benchmark in equity company.
10. HDFC MID CAP OPPORTUNITIES FUND
The company trade in both medium and long term market. The company is known for giving higher returns on the investment. The company has given the average annualized return since past 3 years of -2%.
The company was launched back on 25 June 2007 and is successful in giving the average return of 13% since its launch which is phenomenal!
In 2017, the company hit the all time high of 41.7%. While back in 2019 the annualized return of the company was 0.2% which is quite good!
The company is ranked 24 in the mid cap sector. The lump sum investment required is of Rs. 5000 and to start SIP, it just requires the investment of Rs. 500.
BASIC CONSIDERATIONS WHILE SELECTING A MID CAP COMPANY
One needs to overview basic parameters while selecting a mid cap company. It may seem to a tedious job but looking into the qualitative and quantitative parameters is very important before making a smart investment.
The basics pointers to be considered are:
- Check the Rating; while making a start, checking up the mutual fund rating is a good step. It helps to have an assurance that the investment made by us is safe and sound.
- Asset under management, fund age, past year performance, expense ratios are needed to be checked thoroughly
- Investor should closely examine the past three year performance of the company closely.
- Reputation; the firm reputation is needed to be checked properly while making an investment. If the company’s reputation is high, it will think twice while doing any manipulation in the account or to undergo any fraudulent activity with the investors.
- Check closely the return, risk and AUM for making a sound investment.
- Investment Process, the investment process of the company shall be well sound. You should closely see where the company utilizes your hard earned money.
- Compare all the companies trading closely. The past 3-5 year trading result gives a good idea about company’s performance.
- The portfolio composition and qualitative reports of the company are needed to be analyzed closely before making the investment
- A fund shall have net worth of Rs 100 crores
- The company shall have less expense ratio
CONCLUSION
An investment made in Mid Cap Company is needed to be made with great caution. A good long term mid cap investment helps the investor to earn high returns on investment. The fund may appear to be risky, but it yields higher profits. A good study of the market trends helps us to make sound investment. Mid cap company are more safer than small cap companies where the risk is higher and is also safer than large cap companies where returns may fall short.