Tipping Point: Stick to active funds in the mid-cap category

With many large-cap funds not being able to beat their benchmarks, many financial advisors now suggest that you should take some exposure to passive funds there. But most say that it would be premature to think of investing in a passive fund in the mid-cap category. First, you would be hamstrung by the lack of options there. Only two funds have a track record. A third mid-cap ETF has just been launched by Reliance. Moreover, the mid-cap category is not as well researched as the large-cap category. Fund managers can beat the indices in this category by picking stocks that have not been widely purchased, or by going for those where there is a price mismatch. Active fund management has the scope to pay off in this space.