Launched in 1995, the Nippon India Growth Mid Cap Fund has delivered a compounded annual return of 22 per cent in the last 30 years and established the power of compounding yet again.
An investment of ₹1 lakh made in this fund at the time of inception will be worth ₹4 crore now for investors who stayed put for 30 years.
The Nippon India Growth Mid Cap Fund was launched on October 8, 1995, making it one of the established funds in the category.
The high-risk and high-return fund has an asset under management of ₹38,400 crore.
Similarly, the mid-cap funds of Edelweiss MF, Kotak MF and Invesco MF have given returns between 17 per cent and 19 per cent in the last ten years.
Nippon India Growth Mid Cap Fund is one of the oldest in the industry and focuses on investing in companies that deliver above-average growth and have the potential to generate substantial returns over time.
Growth-styled mid-cap funds in the equity space are ideal for long term investments as they prioritise capital appreciation and increase value of investments over time.
Besides, mid-cap funds offer diversification by investing in a variety of stocks to mitigate risk.
The Nippon India Growth Mid Cap Fund has the highest exposure in the financial sector with nearly a quarter of the corpus invested in it.
About 17 per cent each of the corpus is invested in the consumer discretionary and industrial sectors with diversification across sectors such as healthcare, technology, energy and materials.
DD Sharma, MD, MF King, said a growth oriented mid-cap fund primarily invests in mid-sized companies, which are larger than small-cap but smaller than large-cap companies, focusing on growth potential in their investments.
These funds balance the growth prospects of small-cap stocks with the stability of large-cap stocks, offering higher growth potential than large-cap funds but less volatility than small-cap funds, he said.