Everything You Need To Know About Mid-Cap Funds
This blog will help you understand how mid-cap mutual funds work. Understand what type of stocks mid-cap funds invest in. Find out how you can invest in the best mid-cap funds in India.
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A Systematic Investment Plan (SIP) is known to offer a convenient way of investing small chunks of money in mutual funds. In fact, these bitesize SIPs have the potential to compound into a large corpus over time.
Consider a mere ₹2000 SIP for 40 years in a mutual fund with 10% returns. It can generate as much as ₹1,17,78,008 in profits after 40 years. That’s the power of compounding with SIP mutual funds.
However, it’s important to start a SIP in the right mutual fund, which can be difficult considering the sheer number of mutual fund scheme variations available in India.
Lucky for you, we’ve compiled a short and sweet list of the best SIPs for 40 years. It includes the likes of small-cap, mid-cap, large-cap, flexi-cap, and international mutual funds. You can consult a Cube Wealth Coach or download the Cube Wealth App.
Important Note: A lot can shift over 40 years when it comes to financial markets. The fund quality, manager, fund goal, and more may change over the years. That’s why you’ll have to get a portfolio analysis done regularly to stay on top of your SIPs.
The list of best SIPs for 40 years primarily includes equity funds. The reason? They’re known to generate potentially high returns over the long term, which can be useful for goals like wealth creation for retirement.
These are the best funds as of now as per our mutual fund advisory partner, Wealth First, who has 20+ years of experience in the market.
Mirae Asset Large Cap Fund invests in the shares of companies like HDFC Bank Limited, Bharti Airtel, SBI, and others that are known to be stable and have a track record of consistent growth.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹720,825,556.
Motilal Oswal Focused 25 Fund can invest in as many as 25 stocks, most of which are from the large-cap category like Housing Development Finance Corporation (HDFC), TCS, ICICI Bank, and more.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹465,103,988.
Axis Focused 25 Fund invests in up to 25 stocks from different market caps, which includes the likes of Bajaj Finance, Avenue Supermarts, TCS, Info Edge (India), and more.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹1,144,157,043.
Invesco India Contra Fund uses a contrarian approach to buying stocks. It primarily looks to identify stocks that have a sound business model but are undervalued in the market.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹972,492,739.
Canara Robeco Emerging Equities Fund looks to identify companies that are currently in their growth phase and have the potential to become iconic leaders in their domain in the future.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹1,534,924,455.
HDFC Flexi Cap Fund can invest in stocks from different market caps, which includes the likes of SBI, Indian Railway Finance Corporation, Power Finance Corporation, CESC, and more.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹351,654,220.
Axis Small Cap Fund primarily invests in the shares of budding companies like Tata Elxsi, Galaxy Surfactants, Brigade Enterprises, and more that are classified under the small cap category.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹4,045,712,815.
PGIM India Midcap Opportunities Fund looks to identify strong midcap companies with potential for consistent growth. Its portfolio includes Mphasis, Ashok Leyland, Cummins India, Sanofi India, and more.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹2,576,053,201.
Edelweiss Greater China Equity Off-shore Fund is an international fund that invests in JPMorgan Funds - Greater China Fund, which has exposure to Chinese stocks like Alibaba, Tencent, Meituan, and more.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹6,266,972,834.
PGIM India Global Equity Opportunities Fund invests in PGIM Jennison Global Equity Opportunities Fund, whose portfolio includes shares of companies from countries like Brazil, UK, USA, and more.
This means that a SIP of ₹20,000 for 40 years would’ve earned you a profit of approximately ₹7,889,605,418.
You can start a SIP in the best mutual funds for 40 years using investment apps or by visiting the website of mutual fund houses. Broadly speaking, the process is more or less similar and requires you to follow these steps:
Bear in mind that it’s important to research diligently before investing your hard-earned money in any mutual fund. You can always consult a trained advisor in case you need help.
40 years is a really long time in the market. During that time, your investment needs may change, the stocks in the fund may be replaced, the fund manager may pivot to different investment philosophy, etc.
That’s why it’s crucial to revisit your portfolio at least once a year with thorough portfolio analysis. You can get an actual idea of how this works by clicking on the “Free Tools” section at the top. You can consult a Cube Wealth Coach or download the Cube Wealth App.
Visualize the potential returns that you can earn with a 40-year SIP across different returns percentages to find out how diligent you need to be to get to your financial goals. Follow these steps to get started:
Ans. Long-term SIP investments may qualify for tax benefits under Section 80C, 80CCD, and other relevant sections of the Income Tax Act. Consult with a tax advisor for personalized guidance.
Ans. It's advisable to review your long-term SIP investments annually or semi-annually to ensure they remain aligned with your goals and perform as expected.
Ans. Yes, you can have multiple SIPs running concurrently, each dedicated to different financial goals. This allows for better organization and customization of your investment strategy.
Ans. Setting up automatic SIPs ensures consistent and disciplined investing. It eliminates the need for manual contributions and helps you take advantage of rupee cost averaging.
Selecting the best SIP for a 40-year investment horizon is a significant step in building wealth and achieving long-term financial goals. SIPs offer a disciplined approach to investing, taking advantage of compounding over time. The choice of SIP should align with your specific financial objectives and risk tolerance. Evaluating the fund's historical performance, expense ratios, and alignment with your goals is crucial.
Diversification across different asset classes and periodic reviews of your SIP portfolio are vital to ensure that your investments remain consistent with your evolving financial needs and market conditions. Seeking professional advice can offer valuable insights, helping you make informed decisions and potentially achieve your long-term financial aspirations. Remember that the best SIP for a 40-year investment is one that suits your unique financial situation and goals.
Note:
Facts & figures are true as of 28-10-2021. The funds mentioned are suggestions based on funds handpicked by Cube's expert Mutual Fund Advisory partner. Before investing please take Cube's Portfolio Planner feature to ensure the funds you see are right for your goals, life stage, risk level and finances. None of the information shared here is to be construed as investment advice. You can consult a Cube Wealth Coach or download the Cube Wealth App.
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