Invesco India Midcap Fund for Long-Term Growth

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If you’re seeking long-term capital appreciation from mid to small-sized stocks, then the Invesco India midcap fund is a fund that you should explore. Making the decision of which mutual fund to invest in is similar to picking an auto for a long trip? There is a need of knowing where you should go, what level of risk you are willing to put up and if the vehicle would be suitable for the road ahead.

Before investing in the Invesco India midcap fund direct growth, it is crucial to understand the working of the scheme in case you’re thinking of buying it or the Regular Plan Growth option.

What Is Invesco India Midcap Fund?

This is an open-ended equity mutual fund, which primarily invests in midcap stocks. The scheme is designed to cater to the companies listed in the applicable regulatory framework and comprising the midcap universe.

All of that growth potential can be tempting, but can also lead to higher volatility than the large cap investments.

Understanding the Midcap Fund Category

Midcap mutual funds focus mainly on the business listed in the midcap segment.

In a downturn of the market or an economic recession, midcap stocks may see more extreme price changes. So don’t consider an investment if you don’t take into account the risk.

Investment Objective of the Fund

The aim of investment for this is to generate capital appreciation with the main investment in midcap companies.

Stock markets are not always upward trending. The performance of a fund can be high one year, and low another year.

Key Features of Invesco India Midcap Fund

Before investing, it helps to understand the basic structure of the scheme.

Fund Category

This is falls under the category of Mid Cap Fund.

The indicative asset allocation of the scheme allows it to allocate 65% to 100% of the net assets to equity and equity-related instruments of midcap companies. It may also invest in other companies (outside the midcap category) and any debt and money-market instruments within certain limits.

Benchmark

The fund’s benchmark is BSE 150 Midcap TRI.

Likewise, when making a return calculation for any fund, you should compare it to the comparable fund’s return over the same time period.

But investor should not rely on the past one-year performance as a basis for judgment of a mutual fund. Midcap stocks can be impacted in a unique manner by various market cycles, and a longer time frame can be helpful.

Fund Inception

The allotment of the scheme took place on 19th April 2007. As such, the fund is not a new mutual fund scheme, but has long history of operation.

Nonetheless, it enables investors to learn about the fund’s performance in varying markets. This can be helpful in assessing consistency, volatility and investing strategy.

Minimum Investment

As per the published information, the minimum investment amount is ₹100 and it is also available with additional investment starting with ₹100.

All the investments in the scheme are relatively small, thus the scheme is accessible to the investors who wish to start with a small amount of investment.

Invesco India Midcap Fund Direct Growth

The Invesco India midcap fund direct growth option is another option that investors can consider in the scheme.

Invesco’s performance information states that the Direct Plan was launched from January 1, 2013.

The Direct and Regular plans are sometimes compared to investors since expenses may have an impact on long-term returns.

Why Investors Search for Direct Growth

The Invesco India midcap fund direct growth usually only applies to investors who are seeking to invest in the Direct Plan of the fund, specifically the Growth option.

Unlike the Regular Plan, commissions to the distributors are not covered in the Direct Plan and therefore the expense ratio is lower.

Risk Factors You Should Know

This is an equity-oriented midcap fund, meaning that risk plays an integral part in the story of investing.

Market Volatility

Interest rates, inflation, economic growth, company earnings, and global news and investor confidence are factors that can cause the stock market to react more violently.

Midcap stocks may move a lot more than the well-known large cap stocks.

It could be that the value of your investment can increase rapidly and drop quite substantially.

Midcap-Specific Risks

There are a number of issues that midcap companies might encounter, such as competition, funding needs, shifting consumer demand and economic slowdowns.

What seems like a promising company today could come up with problems down the road.

A diversified mutual fund can invest in a number of companies, thereby minimizing the risk from any single company.

Factors to Check Before Investing

If you’re considering investing in the Invesco India midcap fund, here are a few simple questions you should ask yourself before you do.

Investment Goal

For what purpose are you making your investment?

Retirement? Children’s education? Wealth creation? One of the goals to be achieved in the future?

Your investment should be for a definite goal.

Risk Appetite

Are you able to withstand a 20% decline or more on your portfolio in periods of bad markets?

If your answer is no, rethink your midcap fund to see if it’s right for you.

Investment Horizon

Investors who can hold onto equity investments for the long-term probably do better at midcap investments.

Costs and Expenses

Be sure to compare the costs of Regular and Direct Plans.

For investors looking to take charge of their investments, the Invesco India midcap fund direct growth option might be worth comparing with Invest Direct-Regular plan.

Is Invesco India Midcap Fund Suitable for Long-Term Investment?

Invesco India midcap fund to consider, for investors with longer investment time-horizon and a desire to invest in midcap companies.

Its goal is long-term capital gains and its investments are mainly towards midcap companies.

Conclusion

The Invesco India midcap fund offers investors a skilled-led equity portfolio to gain exposure to the potential of India’s midcap firms.

Investors may choose between Regular Plan Growth option and Invesco India midcap fund direct growth where the investors prefer to invest through the distributor route and investors prefer to invest through Direct Plan respectively.

FAQs

1. Is Invesco India Midcap Fund suitable for long-term investment?

Ans) It can be a good option for those investors who are able to look past the volatility of midcap equity investments, and are interested in long-term capital appreciation.

2. What is the minimum investment in Invesco India Midcap Fund?

Ans) The minimum investment as published is of ₹100 and allotment starting from ₹100 as per the applicable terms of the scheme.

3. What is the difference between Regular and Direct Plans?

Ans) The Regular Plan is sold on the distributor route and the Direct Plan is sold direct and the expense ratio is lower.

4. Does Invesco India Midcap Fund offer SIP investment?

Ans) Yes. The scheme offers investment options in SIPs with a minimum investment amount as given in the frequency.

5. Is Invesco India Midcap Fund a high-risk investment?

Ans) This is a mid cap equity fund, which has a higher market risk and is recommended for investors with a long term investment horizon and who can tolerate market volatility.