Improve Your Long-term Equity SIP Returns with this One Simple Idea

Improve Your Long-term Equity SIP Returns with this One Simple Idea

Investing in long-term equity SIPs (Systematic Investment Plans) is a popular strategy for wealth creation. However, achieving exceptional returns requires more than just regular investments. That said, a single, straightforward idea can potentially skyrocket your long-term equity SIP returns.

This article highlights the significance of maintaining exposure to midcap equity funds, especially during flat market phases, as they have often outperformed large-cap stocks. By diversifying your portfolio and including midcaps, you can potentially boost your returns and navigate market fluctuations more effectively.

Large-cap stocks offer stability and are considered safer investments. However, they tend to provide average returns over time. On the other hand, midcap stocks, such as those included in the Nifty Midcap 150 index, have shown the potential to deliver superior returns. Start your journey towards maximizing your wealth and achieving your financial goals with Koshex!

Understanding the Power of Systematic Investment Plans (SIPs)

Systematic Investment Plans (SIPs) are investment tools designed to help individuals build wealth over the long term in a disciplined manner. They offer a hassle-free approach to investing, making it easier for both beginners and experienced investors to grow their wealth steadily.

One of the key advantages of SIPs is the power of rupee cost averaging. Since you invest a fixed amount regularly, you end up buying more units when prices are low and fewer units when prices are high.

This strategy helps average out the purchase price of your investments over time. By spreading your investments across different market cycles, SIPs help reduce the impact of short-term market volatility.

Moreover, SIPs instill the habit of disciplined saving and investing. They encourage you to stick to your investment plan and avoid making impulsive decisions based on short-term market fluctuations.

This long-term perspective is crucial for wealth creation, as it allows your investments to grow steadily over time.

Discover the power of our SIP calculator – a tool that helps you visualize how your small regular investments can accumulate into significant savings over time, bringing you closer to your financial goals

The Role of Asset Allocation

When it comes to investing, one of the crucial aspects that can significantly impact your long-term returns is asset allocation.

Asset allocation refers to the distribution of your investment funds across different asset classes, such as stocks, bonds, and cash equivalents. This strategy plays a vital role in diversifying your portfolio and managing risk effectively.

This approach helps reduce the potential impact of any single investment performing poorly. By diversifying, you can potentially minimize the risk associated with specific stocks or sectors and increase the likelihood of achieving more stable returns over time.

Exploring Midcap Equity Funds

One strategy that has shown promising results is allocating a portion of your equity SIP portfolio to midcap funds. As mentioned above, research has indicated that midcap funds have, on average, delivered higher returns compared to large-cap funds over the long term.

During Flat Market Phases

Midcap equity SIPs have demonstrated their potential to generate higher returns than large-cap SIPs. The Nifty Midcap 150 index, for instance, has witnessed times when it has outperformed the broader market indices. This performance can be attributed to the growth opportunities and market dynamics specific to midcap companies.

Asset Allocation

To enhance your long-term equity SIP performance, you can consider maintaining at least a 20-30% exposure to midcap funds in your portfolio.

This allocation can provide a boost to your returns, especially when investing for a longer time frame. While lump-sum investments in midcaps can be volatile, incorporating them through SIPs allows you to average out the purchase cost and benefit from rupee cost averaging.

Factors to consider while selecting the Right Midcap Equity Fund

When it comes to selecting the right midcap equity fund, it is crucial to consider several factors to make an informed investment decision. Here, we will discuss these factors in a simplified manner, helping you navigate the selection process with confidence.

  • Fund Performance: Evaluate the historical performance of midcap equity funds. Look for consistent returns over different market cycles and compare them against relevant benchmarks.
  • Investment Philosophy: Understand the investment philosophy of the fund. Does it align with your risk appetite and investment goals? Some funds may focus on growth-oriented midcap stocks, while others may adopt a value-oriented approach.
  • Fund Size and Assets Under Management (AUM): Consider the fund’s size and AUM. While a larger AUM may indicate investor confidence, it’s essential to ensure that the fund size is not so large that it becomes difficult to manage the midcap segment effectively.
  • Expense Ratio: Evaluate the expense ratio, which represents the annual fees charged by the fund house. Lower expense ratios can enhance your overall returns over the long term. Compare the expense ratios of different midcap equity funds to identify cost-effective options.
  • Risk Factors: Assess the risk factors associated with the fund. Midcap stocks can be volatile, so consider the fund’s risk management practices and the extent of diversification within the portfolio.

Navigating Market Volatility

Market fluctuations can impact the value of your investments, and understanding how to manage volatility is essential to stay on track toward your financial goals.

Staying Invested during Turbulent Times

While market downturns may be unsettling, trying to time the market by exiting your investments can often result in missed opportunities and lower returns. Historical data has shown that investors who remain invested in the market during downturns have been able to benefit from subsequent recoveries and long-term growth.


By spreading your investments across different asset classes and sectors, you can reduce the risk associated with any single investment.

Also, allocating a portion of your equity SIP portfolio to midcap funds can be beneficial as their growth potential can help offset the impact of market volatility.


Midcap equity funds emerge as a key driver in skyrocketing your long-term equity SIP returns. By recognizing their historical outperformance compared to large-cap funds, you can tap into their potential for higher returns. Maintaining a 20-30% exposure to midcaps in your equity SIP portfolio can significantly enhance your investment performance.

SIPs allow for consistent and disciplined investments while leveraging the benefits of rupee cost averaging. This approach smoothens out market fluctuations and optimizes your investment cost over time.

By spreading your investments and including midcap funds, you can mitigate the impact of market volatility and capitalize on growth opportunities in different segments.

At Koshex, we offer a seamless and user-friendly platform for investing in Mid-Cap Funds. Take advantage of our robust features and unlock the full potential of midcap equity funds. Sign up today!

To unlock the full potential of midcap equity funds and implement these strategies effectively, consider signing up with Koshex. The app allows you to invest in midcap funds, navigate the complexities of the market, and make informed investment decisions with ease.


Q1. Why should I consider investing in midcap equity funds?

Ans. Investing in midcap equity funds offers the potential for higher returns compared to large-cap funds. Historical data has shown that midcap funds have outperformed large caps over the long term. By including midcaps in your portfolio, you can tap into their growth opportunities and potentially boost your long-term equity SIP returns.

Q2. What role does market volatility play in SIP returns?

Ans. Market volatility can impact the value of your investments in the short term. However, it is important to stay invested during turbulent times rather than trying to time the market. Historical data has shown that investors who remain invested during market downturns have been able to benefit from subsequent recoveries and long-term growth.