A mid cap mutual fund is a type of mutual fund that invests in the stocks of mid-cap companies. As per SEBI (Securities and Exchange Board of India) guidelines, mid cap funds must allocate at least 65% of their investment corpus in mid cap companies. Mid-cap companies in India are businesses ranked between 101 and 250 on the basis of market capitalisation (Rs.5,000 crore to Rs.20,000 crore). If you are planning to invest in the best mid cap mutual funds, check out our list of 20 top-performing mid cap funds in 2023.
Listed below are the 20 best performing mid cap mutual funds 2023 (Updated on 27th February 2023):
|Best Mid Cap Funds||Features|
|Baroda BNP Paribas Mid Cap Fund||NAV: ₹57.80|
Expense Ratio: 2.17%
|Quant Mid Cap Fund||NAV: ₹127.43|
AUM: ₹1550.74 Cr
Expense Ratio: 2.68%
|PGIM India Midcap Opportunities Fund||NAV: ₹41.72|
AUM: ₹7707.73 Cr
Expense Ratio: 1.94%
|Axis Midcap Fund||NAV: ₹64.38|
Expense Ratio: 1.86%
|Motilal Oswal Midcap Fund||NAV: ₹49.39|
AUM: ₹3769.3 Cr
Expense Ratio: 2.04%
|Kotak Emerging Equity Fund||NAV: ₹74.28|
AUM: ₹23926.94 Cr
Expense Ratio: 1.68%
|Invesco India Midcap Fund||NAV: ₹85.45|
Expense Ratio: 2.01%
|Nippon India Growth Fund||NAV: ₹2083.28|
AUM: ₹13409.61 Cr
Expense Ratio: 1.83%
|Edelweiss Mid Cap Fund||NAV: ₹50.94|
AUM: ₹2530.97 Cr
Expense Ratio: 2.12%
|HDFC Mid-Cap Opportunities Fund||NAV: ₹99.74|
Expense Ratio: 1.74%
|SBI Magnum Midcap Fund||NAV: ₹142.75|
Expense Ratio: 2.01%
|Tata Mid Cap Growth Fund||NAV: ₹240.51|
AUM: ₹17579.67 Cr
Expense Ratio: 2.16%
|UTI Mid Cap Fund||NAV: ₹178.26|
Expense Ratio: 1.95%
|DSP Flexi Cap Fund||NAV: ₹62.18|
AUM: ₹7725.75 Cr
Expense Ratio: 1.84%
|ICICI Prudential MidCap Fund||NAV: ₹157.46|
AUM: ₹3492.87 Cr
Expense Ratio: 2.12%
|Mirae Asset Midcap Fund||NAV: ₹20.39|
AUM: ₹8753.87 Cr
Expense Ratio: 1.83%
|Mahindra Manulife Mid Cap Unnati Yojana||NAV: ₹17.26|
AUM: ₹1060.84 Cr
Expense Ratio: 2.35%
|Taurus Discovery (Midcap) Fund||NAV: ₹71.82|
AUM: ₹74.2 Cr
Expense Ratio: 2.56%
|Aditya Birla Sun Life Midcap Fund||NAV: ₹434.82|
Expense Ratio: 2.05%
|Franklin India Prima Fund||NAV: ₹1476.126|
Expense Ratio: 1.9%
Considered as one of the best performing mid cap mutual funds, Baroda BNP Paribas Mid Cap Fund has 95.83% investment in domestic equities of which 11.73% is in large-cap stocks, 59.73% is in mid-cap stocks, and 15.18% in Small Cap stocks. This scheme is ideal for investors with a high risk-appetite looking for higher returns in the long term. Let’s go through the scheme details:
Quant Mid Cap fund is also considered as one of the best mid cap mutual funds based on its last 5 years’ performance. The primary investment objective of the scheme is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio of mid-cap companies. Let’s look into the scheme details:
PGIM India Midcap Opportunities Fund is an open-ended equity scheme to achieve long term capital appreciation by investing in mid cap stocks. The scheme is suitable for investors with a high-risk appetite. Here are the scheme details:
Axis Midcap Fund is also considered as one of the top-performing mid cap mutual fund schemes. The scheme’s main objective is to achieve long term capital appreciation by investing predominantly in equity and equity-related instruments of mid-cap companies. Let’s look into the scheme details:
Motilal Oswal Midcap Fund is also considered as one of the best performing mid cap mutual fund schemes due to its relatively consistent past-performance. The investment objective of the scheme is to achieve long-term capital appreciation by investing in quality mid-cap companies having long-term competitive advantages and potential for growth. Here are the scheme details:
The investment objective of Kotak Emerging Equity Fund is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by investing predominantly in midcap companies. Let’s look into the scheme details:
This scheme is ideal for investors who are looking to invest money for at least 3-4 years and looking for high returns. At the same time, these investors should also be ready for the possibility of moderate losses in their investments. Let’s look into the scheme details:
The primary investment objective of the scheme is to achieve long-term growth of capital by investment in equity and equity-related securities through a research based investment approach. Let’s look into the scheme details:
Edelweiss Mid Cap Fund scheme is ideal for investors having an investment horizon of 5 to 7 years and willing to ignore any short-term negative performance or sharp changes in the value of investments. Let’s check out the scheme details:
The fund aims to invest in stocks of mid-cap companies that have reasonable growth prospects, sound financial strength, sustainable business models and acceptable valuation that offers potential for capital appreciation. Let’s look into the scheme details:
SBI Magnum Midcap Fund aims to provide investors with opportunities for long-term growth in capital by investing predominantly in a well-diversified basket of equity stocks of Midcap companies. The fund predominantly invests (minimum 65%) in midcap stocks. Here Are the fund details:
Tata Mid Cap Growth Fund is an open-ended equity fund which invests predominantly in equity and equity related securities of well researched growth oriented mid cap stocks. The scheme is ideal for investors looking for long-term capital growth. Let’s check out the scheme details:
UTI Mid Cap Fund is an open-ended equity scheme predominantly investing in mid cap stocks. The fund focuses on companies with scalable business models and long runway for growth. Here are the scheme details:
This fund invests flexibly across carefully selected companies of different sizes- large, mid or small. It aims to invest in quality businesses with strong business models, growth potential and led by reliable management. Here are the scheme details:
This is an open-ended equity scheme that aims for capital appreciation by investing in diversified mid cap companies. The scheme is ideal for investors who want to stay invested for the long-term irrespective of short-term downturns. Let’s get into the scheme details:
Mirae Asset Midcap Fund is one of the best mid cap funds, the scheme’s investment goal is to provide long-term capital appreciation from a portfolio that primarily consists of Indian equity and equity-related securities of midcap companies, making up its investments (>65%) in mid cap companies.
Mahindra Manulife Mid Cap Unnati Yojana invests in domestic equities at a rate of 96.51%, with 5.31% in large cap stocks, 45.35% in mid cap stocks, and 28.88% in small cap stocks. This fund could be suitable for long-term investors with high risk tolerance levels.
Taurus Discovery MidCap Fund is one of the top midcap funds for investors looking to invest for at least 3-4 years with high returns. This fund invests 99.01% of its assets in domestic equities, with 2.92% in Large Cap stocks, 50.11% in Mid Cap stocks, and 28.84% in Small Cap stocks.
This fund’s investment goal is long-term capital growth by investing primarily in ‘Mid-Cap’ stocks. The fund currently invests 25.15% in consumer discretionary, 22.1% in financials and 17.3% in materials among 7 other sectors.
This midcap fund is an open ended equity scheme that primarily invests in midcap stocks, such as 96.05% investment in domestic equities, with 9.53% in Large Cap stocks, 53.47% in Mid Cap stocks, and 17.32% in Small Cap stocks. Suitable for long-term investors seeking high returns.
Mid cap funds predominantly invest in the stocks of mid-sized companies in a bid to offer long-term capital growth. Fund managers of actively-managed mid cap funds make active investment decisions among the basket of mid cap companies. This is done on the basis of research and analysis with the intention to beat their respective benchmark indexes. The fund manager invests the pooled money mostly in mid-cap stocks. The remaining corpus could be invested in large cap, small cap and debt securities based on the fund manager’s decision and the scheme’s objective.
Let’s understand this with an example. Say, you’re planning to invest in HDFC Mid-Cap Opportunities Fund. The fund has 95.54% investment in domestic equities of which 2.82% is in large-cap stocks, 58.65% is in mid-cap stocks, and 19.68% is in small-cap stocks. You can see a significant corpus is invested in mid-cap stocks, followed by small-cap stocks. You may ask – why does the fund invest in small cap equity stocks? Well, this is done to give investors potentially higher returns in the long term.
Poin to Note
Mid-cap companies are more volatile than large-cap companies, but they also have a higher potential for yield generation because they are still in their growth phase. As a result, these funds can earn significant returns in the long-term – 7 to 10 years.
Here are some of the features of mid cap mutual funds:
Before you invest in the best mid cap mutual funds, we suggest you take the following factors into account:
Though fund performance should not be considered as the holy grail while selecting funds, however, any fund that has performed consistently in the last 5 years or more, even during market downturn should give you a fair idea about the fund.
Investors might want to consider having a long-term investment horizon to benefit from investing in the top midcap funds. That said, investors must make sure to identify their financial goals before deciding the duration of the investment.
Fund houses in India charge a fee for their administrative and management services. This fee is called the expense ratio and is expressed as a percentage of a fund’s total assets. So, when a scheme has a lower expense ratio, it indicates higher returns on investment.
In the end, your investment decision depends on your investment/financial goals.
Consider the fund’s risk level and expected return in relation to your overall investment strategy and risk tolerance.
Mid-cap equity funds could be ideal for investors who:
Mid cap funds are considered to be more volatile than large-cap funds, but also have the potential for higher returns, especially if you stay invested for the long-term.
Mid cap funds usually focus on companies with strong growth potential, making them a good option for investors who are looking to grow their portfolio over the long-term.
Mid cap funds typically invest in a diversified portfolio of companies across various industries and sectors, providing investors with exposure to different sectors. This also helps mitigate risk.
Mid cap funds can be considered as a good option for investors who have a moderate investment horizon, meaning they are willing to stay invested for at least 5-7 years to reap the benefits of the returns.
Here’s how you can invest in mid cap funds:
Select the mid cap fund scheme that’s aligned to your goals and risk appetite
Choose whether you want to go for direct or regular plans
A direct plan would allow you to buy mutual fund units from the fund house. The expense ratio or the total cost of the fund would be less but you won’t get any investment advice.
A regular plan entails you buying mutual fund units via a broker or third-party. The expense ratio is more and so is the total cost of the fund, which might eat into your returns. However, the good part is you may get sound investment advice from the broker.
Even though investing in mid cap funds have a certain amount of risk associated with them, they have the capability to offer higher returns than large cap funds.
Here are the benefits of investing in mid cap funds:
Investments spread across various sectors and capitalisations will help you diversify your portfolio. This will make an investment in mutual funds moderately risky as compared to a direct equity investment.
Mid cap funds are open-ended equity funds whose units are easily redeemable. You can easily buy and sell units of mid cap funds at the prevailing Net Asset Value (NAV). They do not have any lock-in period; hence, these are high in liquidity.
Experienced fund managers professionally manage these funds. They make investment decisions based on proper research and investment objectives, and that reflects their expertise.
Mid cap companies have the potential to grow with time. Hence, investing in such funds can bring investors good returns over a significant period of time.
Investing in mutual funds is not a costly affair. You can start investing via the lump sum or Systematic Investment Plan (SIP) method. If you choose to invest through SIP, you can start investing with just Rs. 500.
Mid cap funds are taxed in the same way as any other equity fund.
Point to Note
Indexation is a process of adjusting the cost of an investment for inflation. It helps to increase the tax-efficiency of an investment. If you choose to claim indexation, the cost of the investment is adjusted for inflation, thereby reducing the capital gains and the corresponding tax liability.
Similar to any other mutual fund investments, investing in the best mid cap mutual funds 2023 involves some inherent risks. You should consider your investment goals and risk appetite before investing in mid-cap equity funds.
Alternatively, you can start investing in Navi Mutual Fund’s schemes if you want to invest in pure equity. Navi offers a wide range of low-cost mutual fund schemes across sectors and geographies, including the US market. Worried about the risks? Well, you can start investing with as low as Rs.10!
The suitability of mutual funds varies with investors owing to different financial goals. That said, mid cap mutual funds are less risky compared to small-cap funds. One must use any one of these two funds after considering crucial aspects like investment horizon, financial risk appetite, and more.
Based on their asset allocation, mutual funds are classified into mid cap funds, large-cap funds, and small-cap funds. While a mid cap mutual fund invests in the stocks of mid-cap companies, large-cap, and small-cap mutual funds primarily invest in large-cap stocks and small-cap stocks, respectively.
As aforementioned, mid cap funds invest in stocks of mid-cap companies. On the other hand, bluechip funds predominantly invest in large-cap stocks.
No mid cap funds do not come with a lock-in period.
No investments in mid cap funds do not qualify for tax exemption.
Like any other equity investments, mid cap funds come with their own share of risks. These are market-linked instruments and are subject to volatility. Investors who worry about short-term market downturns could consider other diversified investment options. However, investors who want to stay invested for the long-term, say more than 5 years, could consider investing in mid cap funds. In fact, mid cap funds have the potential to offer risk-adjusted returns if you stay invested for the long-term.
Consider your investment goals and risk appetite before investing mid cap funds. If you are looking for short-term growth, mid cap funds might not be the ideal option. Similarly, if you are sensitive to market volatility, you should go for safer investment options. However, if you plan to stay invested for the long term, you could earn substantial returns on your investments.
Here are the top-performing mid cap funds based on 5-year returns:
1. Baroda BNP Paribas Mid Cap Fund
2. Quant Mid Cap Fund
3. PGIM India Midcap Opportunities Fund
4. Axis Midcap Fund
5. Motilal Oswal Midcap Fund
Mid cap funds are meant for investors having a long-term investment horizon of 5 to 7 years or more. The true potential of a mid cap mutual fund is unlocked if you’re uninfluenced by short-term market downturns and stay invested for the long-term. A 10-year SIP investment in mid cap funds could help you earn inflation-beating and risk-adjusted returns higher than large-cap investments for the same duration.
Here are the best mutual funds based on 3-year returns:
1. Baroda BNP Paribas Mid Cap Fund
2. Quant Mid Cap Fund
3. PGIM India Midcap Opportunities Fund
4. SBI Magnum Midcap Fund
5. Mirae Asset Midcap Fund
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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