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Selecting the right fund is crucial when investing in mutual fund schemes. Whether you invest via SIP or a lump sum, choosing the right fund can lead to substantial wealth creation. This holds especially true for long-term investments. We are discussing the HDFC Mid-Cap Fund (Direct Growth plan), which has generated significant wealth for investors over the long term.

**An investment of ₹10 lakh would have grown to ₹1.25 crore today**

Had you invested a lump sum of ₹10 lakh in the HDFC Mid-Cap Fund (Direct Growth) in 2013, your investment would have grown to ₹1.25 crore by now. This return is calculated based on the growth of the fund's Net Asset Value (NAV). It is an open-ended scheme, meaning investors can invest in or redeem money from the fund at any time.

**The scheme primarily invests in shares of mid-cap companies**

This equity scheme from HDFC Mutual Fund primarily invests in the shares of mid-cap companies. According to the fund house, the fund focuses on maintaining at least 65% of its portfolio in mid-cap stocks at all times. However, it falls into the high-risk category; therefore, it is suitable only for investors who have the appetite for risk.

**The fund's Direct Plan was launched in 2013**

The fund was launched on January 1, 2013. Long-term compounding has played a significant role in the fund's impressive returns. While shares of mid-cap companies are subject to higher volatility, they also tend to deliver higher returns when the economy and corporate earnings perform well. The fund invests in companies across various sectors, offering the benefits of diversification and helping to mitigate risk.

**The fund has delivered an annual return of over 20% over the long term**

The Direct Growth plan of this fund has delivered an annual return exceeding 20% ​​over the long term. This scheme was launched in June 2007, though its direct plan was introduced in January 2013. While the fund has delivered impressive returns, experts advise against making investment decisions based solely on past performance.

Do not base investment decisions on a fund's past performance

According to experts, investors should select a fund by considering their investment objectives, risk appetite, and investment horizon. Equity funds, in particular, yield good returns only when investments are made for the long term—whether through a lump-sum amount or a Systematic Investment Plan (SIP).

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.