Is it a good time to invest in midcap mutual fund schemes?

Midcap and smallcap schemes have been going through a tough phase for some time now. These schemes were hit badly in the the last six months. Midcap category gave an average return of -5.63 per cent and smallcap schemes generated –7.75 per cent in the six-month period. However, mutual fund advisors believe it is an opportunity for investors to start investing in these schemes.

“Midcaps are available at throwaway prices, almost at 30 per cent discount. This is the right opportunity to in ..

Motilal Oswal, Chairman and MD, MOFSL, says “We think even the midcap correction is overdone and selectively midcaps should start stabilising. Broad markets are currently holding well and we think we have a case to move higher towards 11k Nifty mark in short term.”

Mutual fund advisors say that midcaps and smallcaps have corrected around 30 to 70 per cent. They say that most big institutions are dumping mid- and small-caps and moving to largecaps.

“For financial planning purposes, if an investor needs to allocate to midcaps or smallcaps, for a long-term period of at least five years, s/he may go ahead and start investing via SIPs or STPs. We do not recommend lumpsum investments in midcap and smallcap schemes,” says Joydeep Sen, Founder, wiseinvestor.in.

He adds that this correction should instead be used as an opportunity to accumulate higher number of units. Once you buy anything at low prices, you can generate high returns whe ..



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