Mid Cap Index Mutual Funds

Mid cap index funds are a type of equity mutual fund that invests in the stocks of mid-sized companies.
Mid Cap Index Mutual Funds
3 min
10-May-2024

These days investors are presented with various investment options, each tailored to meet different financial goals. One such option that strikes a balance between growth and risk is mid cap index mutual funds. In this article, we will explore what mid cap index mutual funds are, their benefits, and why they might be a suitable addition to your investment portfolio.

Before delving into the details of mid cap index mutual funds, let us understand the fundamentals of mid cap funds and index funds.

What are mid cap index mutual funds?

Mid cap index mutual funds combine the characteristics of mid cap funds and index funds. They track the performance of a mid-cap index, offering investors exposure to the growth potential of mid-sized companies while adopting a passive investment strategy.

These funds do not attempt to surpass the performance of the index through active selection of mid cap stocks. Instead, their objective is to mirror the performance of mid cap indices such as NIFTY Midcap 150 by maintaining the same stocks as the index in equivalent proportions.

Overview of mid cap funds?

Mid cap funds focus on companies with a moderate market capitalisation, falling between large-cap and small-cap categories. Typically, these companies are those positioned in the range of 101 to 250 in the list of companies based on market capitalisation. These companies offer a potential for growth that is higher than large caps and a level of stability greater than small caps.

Overview of index funds?

Index funds are a class of mutual funds designed to replicate the performance of a specific market indexes like NIFTY and SENSEX. Instead of actively managing a portfolio, these funds aim to mimic the returns of the chosen index. This passive approach often results in lower fees compared to actively managed funds.

Benefits of investing in mid cap index mutual funds

  • Diversification: Mid cap index mutual funds provide diversification by investing in a basket of mid cap stocks, spreading the risk associated with individual companies.
  • Cost efficiency: As index funds follow a passive strategy, they generally have lower management fees compared to actively managed funds, maximising returns for investors.
  • Moderate risk and growth potential: Investing in mid cap stocks strikes a balance between growth potential and risk, making these funds suitable for investors seeking a moderate level of risk in their portfolio.

Attributes of mid cap index mutual funds

  • Moderate risk and balance between growth potential and stability.
  • Medium to long-term investment horizon.
  • Diversification in their investment portfolio.

How to invest in mutual funds on the Bajaj Finserv Platform

Mutual fund investments via the Bajaj Finserv platform is a simple procedure. Just follow to these steps.
Step 1: Visit the “Mutual Funds Listing” page on the Bajaj Finserv platform
Step 2: Filter by scheme type, risk appetite, returns, etc, or choose from the top performing funds list.
Step 3: All the mutual funds of the particular category will be listed, along with the minimum investment amount, annualised return, and rating.
Step 4: Get started by entering your mobile number and sign in using the OTP.
Step 5: Verify your details using your PAN, date of birth. If your KYC is not complete, then you will have to upload your address proof and record a video.
Step 6: Enter your bank account details.
Step 7: Upload your signature and provide some additional details to continue.
Step 8: Choose and select the mutual fund that you want to invest in.
Step 9: Choose whether you want to invest as SIP or lumpsum and enter the investment amount. Click on ‘Invest Now’
Step 10: Select your payment mode i.e., net banking, UPI, NEFT/ RTGS.
Step 11: Once your payment is done, the investment will be complete.

Your investment will start reflecting in your portfolio within 2-3 working days.

Conclusion

Mid cap index mutual funds provide a unique blend of growth potential and moderate risk, making them an attractive option for investors seeking diversification. Whether you are a seasoned investor or just starting, these funds offer an avenue to capitalise on the growth of mid-sized companies.

It offers a user-friendly experience for exploring and investing in mutual funds, enabling individuals to make informed decisions and optimise their financial future.

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Frequently asked questions

Is there any midcap index fund?
Yes, there are several midcap index funds available for investors. These funds typically track the performance of midcap indices, offering exposure to a diversified portfolio of mid-sized companies. Investing in midcap index funds can be a strategic way to gain exposure to the growth potential of mid-sized companies while diversifying risk across a broader market segment.
How to buy mid-cap index?
To buy a mid-cap index, start by opening an account with a brokerage or mutual fund provider. Research mid-cap index funds based on performance and fees. Log in to your account, select the desired fund, and specify the investment amount. Review and confirm your buy order, then monitor your investment regularly. This straightforward process enables investors to access mid-cap indices and diversify their portfolios efficiently.
What is a mid-cap value index fund?
A mid-cap value index fund invests in mid-sized companies showing value characteristics. It tracks indices featuring mid-cap stocks with traits like low price-to-book ratios or attractive dividend yields. Investors aiming for growth and value exposure in their portfolios can consider these funds for diversification within the mid-cap segment.
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