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What are Midcap Funds
Midcap funds are equity mutual funds, which have to invest at least 65% of their total assets in midcap companies. According to the SEBI regulations, midcap companies are those ranked from 101st to 250th in terms of full market capitalisation.
Why Invest in Midcap Mutual Funds
Midcap companies have the potential of generating faster earnings growth than large cap companies. These companies usually belong to high growth sectors or have a niche market segment. Midcap companies are also better positioned to derive greater benefit during economic revivals. However, these companies are relatively under-researched with significant gaps between their intrinsic values and market price. Fund managers accurately identifying these gaps can exploit them to generate higher returns than the broader market over a period of time.
Table of 10 Best Midcap Mutual Funds (Regular Plans):
| Fund Name | Returns (% p.a.) | |||
| 1 year | 3 year | 5 year | 10 year | |
| Invesco India Mid Cap Fund | 4.23 | 25.84 | 24.78 | 18.60 |
| HDFC Mid Cap Fund | 3.15 | 24.41 | 25.59 | 18.53 |
| WhiteOak Capital Mid Cap Fund | 1.63 | 24.18 | – | – |
| Edelweiss Mid Cap Fund | -1.14 | 23.93 | 25.38 | 18.49 |
| Motilal Oswal Midcap Fund | -12.62 | 23.21 | 28.37 | 17.77 |
| Nippon India Growth Mid Cap Fund | -1.31 | 23.03 | 25.04 | 18.41 |
| HSBC Mid Cap Fund | -5.43 | 22.89 | 20.79 | 16.24 |
| JM Midcap Fund | -5.17 | 22.63 | – | – |
| Sundaram Mid Cap Fund | -0.23 | 22.63 | 23.20 | 15.60 |
| Mahindra Manulife Mid Cap Fund | -5.30 | 22.32 | 24.00 | – |
Data as on December 11, 2025
Risks of Investing in Midcap Funds
Being emerging companies, midcap companies carry higher risk than their large cap counterparts. Midcap companies also have lower capacity to deal with changing business cycles and more prone to price volatility. Hence, midcap funds too are relatively more volatile in the short-term. However, they usually beat large cap funds in the long term.
Who Should Invest in Midcap Funds
Investors with higher risk appetite and long term investment horizon should opt for midcap funds. Ideally, investors of midcap funds should stay invested for at least 7 years and above to derive the maximum growth potential from an entire business cycle.
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