How to Choose Mid Cap Fund to Start SIP?
The mid-cap segment is known to be one of the important contributors in generating potential returns using compounding effect over a long-term horizon. This reason makes mid-cap funds a vital component of the portfolio of an investor. The investment made in quality stocks of mid-cap companies with excellent management have produced exceptional compounding benefits for the investors over time. Mid-cap funds add better opportunities to your portfolio if the stock-picking of the fund manager is superior for those funds. So, choosing the right fund for the investor’s portfolio is important. Here are the steps to choose a mid-cap fund to invest in through SIP.

Step 1: Assess Your Risk-Appetite
Mid-cap mutual funds are considered risky as they invest in stocks of mid-cap companies which have a lower capital worth than stable large-cap companies. Before investing in mid-cap funds, it is necessary that the investor should analyse his or her risk profile. If the investor is ready to take moderate to high risk, he can choose to invest in mid-cap funds. 

Step 2: Know Your Time Horizon
Mid-cap funds are considered an investment for a long-term horizon. The investors should know the time horizon of investment as well to decide whether the mid-cap category is suitable for his/her or not. If the time horizon of investors is 5-years and more for wealth creation, he can choose a mid-cap fund to start investing in the long-run. However, they are also useful for 3-years and more to get higher returns. 

Step 3: Choose Good Mid Cap Funds
All mid-cap funds are not similar. Choosing the right mid-cap fund is also important as it will be reflective in your long-term returns. To choose a good mid cap fund, investors are required to check the following parameters about them: 

- Past Performance
By checking the past performance of the mid-cap funds, the investor can get insight into how the fund has performed in different market cycles. The past performance also helps the investors in knowing the nature of mid-cap funds in a long-run.
- Fund Manager’s Experience
The fund manager of any mutual fund is an important player as he/she is responsible to take investment decision in selective stocks. If the fund manager is experienced enough in the relevant category and has a good track record in the past, it will be exhibiting in the future performance of the fund. 
- Portfolio Construction
You can also look for companies and sectors where the fund invests. 
- Risk Parameters
Checking the risk parameters, helps the investors to know the efficiency of the fund in generating risk-adjusted returns. 

Step 4: Put Your Money in Mid-Cap Through SIP
By choosing the relevant mid-cap fund for your portfolio based on above-mentioned steps, you can start investing in that fund through SIP. Investment through SIP in the mid-cap fund will make you confident even during the unfavourable market conditions. 

Step 5: Be Disciplined 
When you start investing in mid-cap funds through SIP, it is necessary that you should be consistent in investing over a time horizon. Many investors start investing in mid-cap funds with full enthusiasm but when the market goes wrong, they revert in double speed to withdrew the invested money. The investment in mid-cap funds requires the passion for holding on and staying invested in each market condition to get risk-adjusted returns in the long-term.

Overall, to start investing in mid-cap funds, it is necessary that the investors should know the risk-appetite and time horizon. Further, the investors are also required to check performance, portfolio, risk parameters, and fund manager’s experience. Last but not least, to be disciplined in investing through SIP in mid-cap funds, it is also important to get adequate returns in a long-term horizon.
How to Choose Mid Cap Fund to Start SIP?
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How to Choose Mid Cap Fund to Start SIP?

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