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Can an investor with medium risk appetite invest in mid cap mutual funds?

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Last Updated: Nov 15, 2019, 12.38 PM IST
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I have a medium risk appetite. I don’t want to be extremely conservative. Is it a good time to invest in pure mid cap mutual funds?
-Rupa Deb

First, it is always a great time to invest in equity mutual funds to achieve your long-term financial goals. Investing a small sum regularly over a long period is the only way to achieve your long-term financial goals.

However, you should not consider investing in mid cap mutual funds. Mid cap schemes are suitable for investors with a very high risk appetite or with aggressive risk profile. Mid cap schemes can be extremely risky and volatile. Sure, they have the potential to offer superior returns over a long period. However, a medium risk-taker would find it extremely difficult to continue with the investment when there are huge losses. This is the reason why mid cap schemes are recommended to investors with a very high risk tolerance level and stomach for extreme volatility.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

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