Should I invest more in mid cap mutual funds as they give higher return

Yes, you are absolutely right! Why 5 years, mid & small cap funds have given higher return compared to any other equity funds category in other time periods too, like last 2, 3 or even 10 years.

However, you need to understand that higher return in mid & small cap funds come with higher risk as well. Among various equity mutual funds, while large cap funds are less riskier than diversified equity funds and mid & small cap funds, the diversified equity funds are little less riskier than mid & small cap Funds. Mid & small cap fund and sectoral/ thematic funds have the most risk.

Balanced Funds do not invest 100% in equities (it invest upto 65% in equities and rest in debt instruments) and therefore, it is less risky than any equity mutual funds.

You can check the returns of various mutual fund categories from here https://www.advisorkhoj.com/mutual-funds...

Please note that as the degree of risk is different for each of the above fund categories, investors should consider investing in any fund only after duly assessing their risk profiles. For example - large cap funds could be suitable for moderately high risk profile investors, diversified equity funds are for high risk takers and the mid & small cap funds are for the highest risk profile investors.

Therefore, investing in mid & small cap funds would be wise only when you are able to take very high risk with a minimum investment horizon of 5 years and above.

Coming to your fund selection, Reliance Small cap fund is a good choice for your lump sum investment. But, SBI small and mid cap fund is not taking any fresh investments as of now. You may consider investing in SBI Magnum Midcap Fund.

For your SIPs, even though the fund selection is good, DSP BlackRock Micro Cap Fund is not accepting any fresh investments. You may consider Reliance Small cap fund and / or SBI Magnum Midcap Fund in place of DSP BlackRock Micro Cap Fund.

Hope you find the above suggestions useful. Thanks for writing to Advisorkhoj.