Top Mid-cap Mutual Funds For NRIs In 2024

The  companies in India are growing exponentially, the capital expansion is happening due to increase in revenues and demand for the product.

Whether a company selling goods or rendering services, mid-cap companies are generating revenues on par with  large cap companies.

In the future, you might witness mid-cap companies entering the list of top 100 companies in India.

The Securities Exchange Board of India (SEBI) categorizes the stocks ranked between top 101 to 250 by market-cap as mid-cap stocks.

If you don’t find time to analyze each mid-cap stock then investing in mid-cap funds can be a viable option. 

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What Are Mid-cap Mutual Funds?

Mid-cap funds allocate at least 65% of their assets to equity stocks within mid cap universe (top 101 to 250 companies my market cap). 

This focus on medium-sized companies allows investors to benefit from their growth potential. These funds offer better liquidity compared to small-cap funds, which invest in smaller and less established companies.

However, mid-cap funds are also more volatile than large-cap funds, which invest in well-established, stable companies. Therefore, they are best suited for aggressive investors with a higher risk tolerance and a long-term investment horizon. 

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Best Mid-cap Mutual Funds For NRIs and OCIs in 2024 

Here’s the list of top mid-cap mutual funds for NRIs and OCIs in 2024 

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How Do Mid-cap Mutual Funds Work?

Mid-cap mutual funds invest a large share (at least 65%) of its funds in equities. Typically these companies have market capitalization between 5,001 to 20,000 crores.

Mid cap companies are fairly smaller than large cap companies, thus are highly volatile. Hence, mid cap funds are high risk funds. 

Fund managers select mid-cap stocks based on various criteria, such as financial performance, market position, and growth potential. These funds have a diversified portfolio of mid-sized companies across different sectors to reduce risk.

The ideal investment horizon for a mid-cap fund is long term, 5 to 10 years as the fund is highly volatile.

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Who Should Invest In Mid-cap Mutual Funds?

Mid-cap funds can be your go-to choice if you are a seasoned investor.

And, your risk appetite and awareness about the Indian mutual fund industry play a crucial role before investing in mid-cap funds.

Mid-cap funds help you grow your wealth but are prone to market risks as they are volatile in nature. 

Also, iNRI’s AI powered Smart Investing Tool can guide you in selecting funds based on your risk tolerance, financial goals and preferences.

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Tax Implications For NRIs Investing In Mid-cap Mutual Funds

While investing in best mid-cap funds is necessary, understanding the associated taxes on capital gains is equally important. 

Mid-cap mutual funds like any other equity fund attract capital gains taxes and Tax Deducted at Source (TDS) is applicable to it.

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Old Tax Rates

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New Tax Rates, Budget 2024

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Also, by opting for Double Taxation Avoidance Agreement (DTAA) you can avail additional tax benefits and lower tax rates.

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Conclusion

Mid-cap mutual funds present a compelling investment opportunity for NRIs who are looking for a balance between growth potential and moderate risk. 

These funds target companies that are poised to become the next large-cap giants, making them an attractive option for aggressive investors with a long-term horizon. 

However, due to their volatility, careful consideration of your financial goals, risk appetite, and market conditions is essential before investing. 

Consulting with a financial advisor or using tools like iNRI’s Smart Investing Tool can help you navigate these complexities and select the right mid-cap funds to align with your investment strategy.

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Mid-cap Mutual Funds For NRIs: Frequently Asked Questions (FAQs)

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Are mid-cap funds risky?

Yes, mid-cap funds are riskier when compared to large-cap funds but slightly less riskier in comparison to a small-cap fund.

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Which is more risky, small-cap or mid-cap?

Generally, small-cap funds are riskier when compared to mid-cap funds due to lack of enough liquidity. Further the companies are fairly new and are in their nascent stages. While, mid cap companies are more established than small cap companies. 

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Is mid-cap a good investment for NRIs?

Mid-cap can be a good investment if you’re an aggressive & experienced investor and willing to invest in highly volatile funds.

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Is it the right time for NRIs to invest in midcap funds?

Before you invest, you need to look at the external factors like India’s growth, Indian and global economic conditions. 

It is crucial to look into the global economic conditions as these conditions can have an indirect effect on your investments.

Next, you must ask yourself about your financial goals; whether you’re ready to invest for a longer tenure.

Lastly, you may have to analyze the mid-cap funds’ overall performance for the past year before considering investing.

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Are mid-cap funds good for the long term?

Yes, mid-cap funds are good for the long term. 

Mid-cap funds predominantly invest in equity stocks which can be extremely volatile during a bear market. 

You can mitigate any loss in value arising from short-term fluctuations by holding these funds for a longer-tenure.

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