Small and Mid-Cap Funds: Probable Prospects in 2019

The growth and success of a fund depend on many factors which are different for different type and size of funds. In case of mid-cap funds and small-cap funds, factors like rising prices of crude oil, increase the price of commodities, weak currency, market volatility and other global investment factors tend to hamper their growth prospect. An investor with proper knowledge about the investments and fund market would be able to make the most of small and mid-cap funds in 2019.

Why small-cap and mid-cap funds will work better in 2019?

Both Mid-cap and Small-cap funds have the potential to do well in 2019 in terms of returns but since it is an investment arena, it is not devoid of any risk either. An investor may face losses if the invested entity fails to thrive and expand in future but if it works in favour of the company, the investors can earn good returns from their investment endeavour.

  • The sole reason, why small-cap and mid-cap funds will do better in 2019 is the growing understanding among investors of a falling market. The continuous rise and fall of the market have sharpened the skills of professional advisors and equipped investors better for the lows of the market now more than ever. This understanding will help them earn steady profits in the coming year through such funds.
  • Though small-cap and mid-cap tend to have a relationship of high risk and high returns when invested in quality funds with an active long-term horizon, they ought to show good performance.
  • Investing in small-cap and mid-cap funds for short-term can prove to be risky and incur loses even when the stocks are of good quality; if investors are careful about their choices of the mid-cap and small-cap funds and choose a long-term to stay invested they can enjoy positive returns from their investment endeavour.
  • Those who are more in favour of SIPs can definitely invest in them through small-cap and mid-cap funds and avail its benefits by remaining invested for a long time in good quality funds and irrespective of the market volatility. The current low NAV is deemed beneficial for the investors to enter small-cap and mid-cap funds through SIPs. With an expected increase in the NAV over the next 3-5 years, the small-cap and mid-cap fund investors can expect to earn higher returns on their units.
  • Though most wouldn’t suggest the lump-sum investorsto put money in the small-cap and mid-cap funds because of the current high NAV, lump-sum can consider the possibility of putting their funds in liquid funds and entering small-cap and mid-cap funds in 5-10 slices. This will help the lump-sum investors to combat the effect of making a single entry at a high rate of NAV.

Analytical prowess, thorough knowledge and market experience are the prime tools that can help you invest in fruitful funds. You can consult our professional advisors and fund managers to avail their assistance in choosing the perfect blend of small and mid-cap funds for a profitable 2019.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not an indicator of future returns. Wealth Redefine is a AMFI registered Mutual Fund distributor – ARN - 85350

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