These mutual funds select stocks for investment from the mid cap category — stocks ranked between 101st to 250th by full market capitalization. Mid cap companies are generally well established companies growing rapidly. These companies are expected to become larger in the long term, thus providing superior returns to investors. Minimum investment in equity & equity related instruments of mid cap companies should be 65% of total assets.
Investors who are looking to invest money for at least 5-7 years and are looking for high returns. Overall, midcaps tend to be highly volatile and investors should be prepared to weather market ups and downs. It is recommended to use systematic investment plan (SIP) for recurring monthly investments or systematic transfer plan (STP) for investing lumpsum in these funds.
The minimum investment varies from scheme to scheme. It could range between Rs.100/ – to Rs.5,000/ -.
Mid Cap Funds receive the same tax treatment as other equity funds.
• Short term capital gain (less than one year): 15% of gain
• Long term capital gain (more than one year): 10% of gain in excess of Rs one lakh per year