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Investors with a Long Term Investment Horizon: As we all know, big companies do not get built overnight. Since the underlying asset of mid cap mutual funds is companies that are yet to become big, investors need to be patient with their investments. Also, since these companies are not as financially strong as big companies, during a slowdown they might falter and take time to recover. So, to truly reap the benefits of investing in these funds, one should invest in them for 7 to 10 years.
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Investors willing to take higher risk for a chance to earn higher returns: Mid cap funds carry a higher risk than large cap funds but also give investors the opportunity to earn market-beating returns. So only those investors who have the appetite to take should pick this fund category.
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Investors willing to take higher risk for a chance to earn higher returns: Mid cap funds can be volatile in short to medium term. You might even see a sharp drop in your portfolio’s value and that too suddenly. So only those who are willing to fathom this kind of volatility should invest in them.
Community Manager.