Midcap companies are lesser-known gems of the stock market that have the potential to for long-term growth.
Mid cap funds are mutual funds that aim to capitalise on the growth potential of such stocks. They aim to generate higher returns than the market over a period.
HDFC Mid-Cap Opportunities Fund, Kotak Emerging Equity Fund, Nippon Growth Fund, and Axis Midcap Fund are some of the largest schemes in the category.
While everyone knows about these popular schemes, there are two lesser-known mid cap funds that have surprised investors with their robust performance.
In this editorial, we will compare Edelweiss Mid Cap Fund and Invesco India Midcap Fund, analysing their risk, return, and portfolio strategies.
Fund Overview
# Edelweiss Mid Cap Fund
Launched in December 2007, Edelweiss Mid Cap Fund is a growth-oriented mid cap fund.
It was earlier known as Edelweiss Mid and Small Cap Fund under which it maintained an on-par exposure across mid-cap and small-cap stocks.
After its recategorisation to a mid-cap funds, it aims to identify strong and quality businesses primarily in the mid-cap space.
The fund aims to identify stocks with good earnings growth potential, profitable products and services, and are run by good management.
It adopts a bottom-up approach to pick stocks having the potential to compound wealth over the long term.
Fund Snapshot – Edelweiss Mid Cap Fund
| Inception Date | 26-Dec-07 | SI Return (CAGR) | 14.03% |
| Corpus (Cr) | Rs 9,242 | Min. Lumpsum / SIP | Rs 100 / Rs 100 |
| Expense Ratio (Dir/Reg) | 0.40% / 1.70% | Exit Load | 1% |
# Invesco India Midcap Fund
Launched in April 2007, Invesco India Midcap Fund aims to invest in growth-oriented mid-cap companies that are trading at reasonable valuations.
The fund is benchmark agnostic and uses the bottom-up approach to select stocks.
While picking stocks, the fund managers look for companies with stable business models, attractive return ratios, strong cash flows, and healthy balance sheet positions.
The fund maintains a reasonably concentrated portfolio and takes overweight positions in stocks/sectors that may turn out to be winners.
Fund Snapshot – Invesco India Midcap Fund
| Inception Date | 19-Apr-07 | SI Return (CAGR) | 16.95% |
| Corpus (Cr) | Rs 6,047 | Min. Lumpsum / SIP | Rs 1,000 / Rs 1,000 |
| Expense Ratio (Dir/Reg) | 0.65% / 1.81% | Exit Load | 1% |
Source: ACE MF
Portfolio Comparison of Edelweiss Mid Cap Fund and Invesco India Midcap Fund
As of April 30, 2025, Edelweiss Mid Cap Fund held 74.5% of its assets in mid caps, 10.3% in large caps, and 11.8% in small caps.
It held 75 stocks in its portfolio with Dixon Technologies (India) (3.5%), The Indian Hotels Company (3.2%), and Max Healthcare Institute (3.2%) among its top holdings.
Sector wise, the fund holds higher exposure in finance (14.3%), healthcare (10.9%), and auto & ancillaries (9.5%).
In comparison, Invesco India Midcap Fund carries a relatively lower allocation to mid caps (66.2%), but higher exposure to large caps (13.5%) and small caps (18.9%).
It held 46 stocks in its portfolio with BSE (5.3%), L&T Finance (4.6%), and Prestige Estates Projects (4.3%) among the top holdings.
The fund’s portfolio is skewed towards the finance sector (19.6%), followed by healthcare (18.6%), and retailing (8.4%).
Performance of Edelweiss Mid Cap Fund and Invesco India Midcap Fund
Edelweiss Mid Cap Fund has consistently registered above-average growth over the long-term.
On a rolling 1-year period, the fund generated a lead of 8-11%over the benchmark and category average, respectively.
Over the longer 3-year and 5-year periods too it has maintained a decent lead of 2.7-3.7%.
The volatility of the fund is reasonable compared to the benchmark but slightly higher than the category average.
The fund has delivered commendable risk-adjusted returns, as denoted by its high-ranking sharpe and sortino ratios.
Edelweiss Mid Cap Fund vs Invesco India Midcap Fund – Risk-Reward Comparison
| 1 Yr (%) | 3 Yr (%) | 5 Yr (%) | Std Dev | Sharpe | Sortino | |
| Edelweiss Mid Cap Fund | 41.11 | 26.62 | 32.24 | 16.68 | 0.39 | 0.80 |
| Invesco India Midcap Fund | 40.73 | 25.47 | 29.55 | 16.66 | 0.39 | 0.77 |
| Category Average | 32.83 | 22.99 | 28.53 | 15.93 | 0.34 | 0.69 |
| Nifty Midcap 150 – TRI | 30.11 | 23.93 | 29.53 | 16.47 | 0.35 | 0.71 |
Source: ACE MF
Meanwhile, Invesco India Midcap Fund holds a respectable long-term performance record.
The fund witnessed a muted growth between 2021 and 2023, but it has shown signs of recovery from 2024 onwards.
On a rolling 1-year period, the fund generated a lead of 7.9% and 0.6% over the benchmark and category average, respectively.
Over the 5-year period, it performed in-line with the benchmark but surpassed many of its peers.
The fund has displayed reasonable volatility, while its sharpe and sortino ratios fare better compared to the category and the benchmark.
Conclusion
Both funds maintain a well-diversified portfolio with a long-term view, with Invesco India Midcap Fund showing slightly higher concentration.
A concentrated portfolio can potentially generate higher returns during market rallies but may see a higher downside during bearish market.
Both funds have have robust risk-returns profiles, with Edelweiss Mid Cap Fund currently faring marginally better than Invesco India Midcap Fund.
With relatively small AUMs, both funds can potentially capitalise on the market opportunities better compared to giant-sized schemes in the category.
As an investor, you should ensure the suitability of a fund to your risk profile and financial objectives.
Since mid-cap funds carry high risk, they may be suitable only for investors with a high risk profile and an investment horizon of at least 5-7 years.
# Table Note: Data as of June 04, 2025
The securities quoted are for illustration only and are not recommendatory
Past performance is not an indicator for future returns
Returns are on a rolling basis and in %. Direct Plan-Growth option.
Those depicted over 1-Yr are compounded annualised.
Risk ratios are calculated over a 3-year period assuming a risk-free rate of 6% p.a.
Happy investing.
Disclaimer: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.