I am 23 years old. I plan to invest Rs 2,000 every month in a mid-cap fund for the next 20 years. I have shortlisted HDFC Midcap Opportunities and Franklin India Smaller Companies fund. Which one should I invest in?
-Vivek
You've chosen two excellent funds from the mid- and small-cap category. Both of these funds feature regularly in our recommendations. Both funds are focused on quality and have a reasonable track record. While Franklin India Smaller Companies fund is not as old as HDFC Midcap Opportunities, it does have an impressive track record as well. However, you should be aware that these funds can be extremely volatile. If you can withstand the volatility, then go ahead and invest in any one or both of them. But make sure you review your investments every year. 20 years is a long period of time, and one can't afford to invest in a market-linked instrument and forget about it. These funds will prove to be rewarding over the long-term if they don't lose their focus.
This article was originally published on April 21, 2014.
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