Mumbai33 minutes ago
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If you are planning to invest in mutual funds on the special occasion of Diwali, then large and mid cap can be a good option. According to the official website of Association of Mutual Funds in India (AMFI), Large and Mid Cap has given returns of up to 29.22% in the last one year.
This return is till 18 October 2024. You can make good returns in this fund by investing through Systematic Investment Plan (SIP) for a long time. Now let us first know about Large and Mid Cap Mutual Funds.
What is Large and Mid Cap Mutual Fund?
Large and mid cap mutual funds are equity funds that invest in the top 200 companies of the country. This includes companies with large and mid capitalization. Investing in this category of funds gives higher returns than pure large cap funds.
More benefits by investing through SIP in the long run
It is often seen that investing in equity funds proves to be more beneficial in the long run. The reason for this is that doing SIP in equity funds for a long time reduces the risk of fluctuations in the stock market. The lows and highs of the stock market create an average return and also get the benefit of compounding.
Is SIP the best way to invest?
Perhaps it would not be appropriate to call it the best way of investment, but it can definitely be a good way of investment for people with regular income like salaried people and businessmen who have a fixed income every month. Investing through SIP does not put a heavy burden on the pocket and by continuously investing small amounts, a good amount can be accumulated in the long run.
What is benchmark?
The benchmarks are usually market indices of the Indian stock market such as BSE Sensex and Nifty, against which the returns of mutual funds are compared.
Let us understand this with an example…
If your particular mutual fund has given a return of 59% during a particular period. At the same time, during this period its benchmark has given 70% returns, so this shows that that fund has given less returns as compared to the benchmark. The higher the return a mutual fund gives in comparison to the benchmark, the better its performance is considered.
What is market cap?
According to market capitalization i.e. market value, all the companies of the country have been divided into 3 categories. Among these, companies whose market cap is Rs 20 thousand crore or more are called large cap. Their value is less than Rs 20 thousand crore but more than Rs 5 thousand crore, they are called mid cap companies.
Whereas small cap companies are those companies whose valuation is less than Rs 5 thousand crores. Generally, the top 100 companies in terms of market cap are large cap, 100-250 are mid cap and all the companies beyond that are small cap companies.
