Mid-Cap Mutual Funds

According to the fund scheme, mid-cap mutual funds invest their assets in stocks and other equity instruments associated with mid-cap companies. Under SEBI regulations, at least 65% of the fund's total assets must remain invested in mid-cap companies. SEBI has specified that companies ranked between 101-250 based on their market capitalization will be put under the mid-cap companies.

These funds tend to carry lower risk than small-cap funds, while offering better growth potential than large-cap mutual funds. They are therefore suitable for long-term investors with a moderate level of risk appetite.

According to the fund scheme, mid-cap mutual funds invest their assets in stocks and other equity instruments associated with mid-cap companies. A fund manager diversifies the fund’s (pooled money) among various sectors and industries. They manage the portfolio and review the companies regularly. 

Under SEBI regulations, at least 65% of the fund's assets must remain invested in mid-cap companies. The remaining portion can be invested in other equities, debt instruments and money market instruments, subject to regulatory limits.

Through Paisabazaar, you can invest in mid-cap mutual funds conveniently. Follow these steps to invest:

• Step 1: Open Paisabazaar app and Log in.
• Step 2: Tap on the "Mutual Funds" button under the investment product section.
• Step 3: Browse through the available mid-cap fund options or search for your preferred fund directly.
• Step 4: The next step is to choose whether you are going to make a one-time payment or a Systematic Investment Plan (SIP).
• Step 5: Complete your KYC verification and start investing.

A mid-cap fund is usually taxed like an equity mutual fund, which means your tax depends on how long you stay invested. Capital gains are split into Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG). 

• If you redeem your units before completing 12 months, the entire gain falls into short-term capital gains and is taxed at 20 per cent. 
• If you redeem your units after 12 months, the gain becomes long-term capital gain and you get an annual LTCG exemption of up to Rs 1.25 lakh on it.