Mid-cap mutual funds have consistently delivered stellar returns over the last many years. As of October 30, the category has yielded an average annualised return of 25.89%. Top five mid-cap schemes have generated over 30% annualised returns. With this rate of return, an investment of Rs 1 lakh in these funds five years ago would now be worth between Rs 3.75 lakh and Rs 4.4 lakh. These funds have also rewarded SIP investors.
Among the top 5 mid-cap funds that have delivered over 30% CAGR over the past five years are schemes from leading fund houses such as HDFC Mutual Fund, Motilal Oswal Mutual Fund, and Nippon India Mutual Fund.
Top 5 midcap mutual funds based on five-year performance
1. Motilal Oswal Midcap Fund – Direct Plan
This fund has delivered an impressive 34.58% CAGR over the past five years.
⦁ A lump sum investment of Rs 1 lakh five years ago would have grown to Rs 4.41 lakh today.
⦁ A monthly SIP of Rs 10,000 over the same period would now be worth Rs 12,03,006.
⦁ The annualised return on SIPs over five years stands at 28.24%.
⦁ The fund’s expense ratio is 0.69%.
2. Edelweiss Midcap Fund – Direct Plan
This mid-cap fund has delivered an annualised return (CAGR) of 31.22%.
⦁ A lump sum investment of Rs 1 lakh five years ago would have grown to Rs 3.89 lakh.
⦁ A monthly SIP of Rs 10,000 over the same period would now be worth Rs 11,17,619.
⦁ The 5-year annualised SIP return stands at 25.16%.
⦁ The fund’s expense ratio is 0.40%.
3. HDFC Midcap Fund – Direct Plan
The HDFC Mutual Fund scheme has generated a strong 5-year CAGR of 30.75%.
⦁ A lump sum investment of Rs 1 lakh five years ago would have grown to Rs 3.82 lakh.
⦁ A monthly SIP of Rs 10,000 during this period would now be worth Rs 11,12,717.
⦁ The annualised SIP return over five years stands at 24.97%.
⦁ The fund’s expense ratio is 0.71%.
4. Nippon India Growth Midcap Fund – Direct Plan
This scheme from Nippon India Mutual Fund has also delivered a 5-year CAGR of 30.75% on lump sum investments.
⦁ A Rs 1 lakh lump sum investment five years ago would now be worth Rs 3.82 lakh.
⦁ A monthly SIP of Rs 10,000 would have accumulated to Rs 10,98,936.
⦁ The annualised SIP return over five years is 24.45%.
⦁ The fund’s expense ratio is 0.74%.
5. Invesco India Midcap Fund – Direct Plan
This mid-cap fund has produced a 5-year average annual return (CAGR) of 30.28% on lump sum investments.
⦁ A Rs 1 lakh lump sum investment would have grown to Rs 3.75 lakh in five years.
⦁ A monthly SIP of Rs 10,000 over the same period would now be worth Rs 11,58,722.
⦁ The fund has delivered an annualised SIP return of 26.67% over five years.
⦁ The expense ratio stands at 0.54%.
High risk, high return in mid-cap funds
These return figures for mid-cap funds may appear highly attractive at first glance, but due to their equity exposure, they carry a significant level of market risk. Because of their sensitivity to market volatility, these funds are rated as “Very High Risk” on the riskometer. This is why they are often categorised as high-risk, high-return investments. All the data presented here pertains to Direct Plans, which generally deliver better returns compared to regular plans.
While mid-cap funds are considered riskier than large-cap funds, they are slightly less volatile compared to small-cap funds. It’s also important to remember that the past performance of mutual funds does not guarantee similar returns in the future.
Mid-cap fund investment strategy
According to SEBI regulations, mid-cap funds are required to invest at least 65% of their portfolio in mid-cap stocks. These are companies ranked between 101 and 250 in terms of market capitalisation. Many of these firms are in their growth phase and have the potential to become large-cap companies in the future.
Therefore, over the long term, these funds carry a high potential for returns, provided that investors are willing to withstand market fluctuations.
Who should invest in mid-cap funds
Mid-cap funds are suitable for investors who are seeking high returns from equity investments and have the risk appetite to handle market volatility. These funds are less volatile than small-cap funds but more volatile than large-cap funds.
Investors should consider investing in these funds only with a long-term horizon, ideally for five years or more.
(Disclaimer: The purpose of this article is solely to provide information and not to recommend investment in any specific scheme. Investors should make any investment decisions only after consulting their financial advisor.)
Note: This content has been translated using AI. It has also been reviewed by FE Editors for accuracy.
