Midcap mutual funds allow investors to invest their capital in midcap companies. Midcap funds have the right balance of risk and return, so there is a possibility of high returns from these funds in the mid- to long term. These funds are mandated to invest at least 65% of their assets in midcap stocks.
Who should invest in midcap funds?
If your investment tenure is more than 5 years, then midcap funds can be a great option. Looking at the performance of the last 5 years, many midcap mutual funds have given annualised returns of up to 30%. What this means is that a lump sum investment 5 years ago in any of the top 5 funds would have multiplied the money 4 times.
Midcap mutual funds tend to carry higher risk compared to largecap funds because they invest in companies that are in the growth phase and may experience more volatility. These companies are not as stable as largecap companies, which are generally well-established with a proven track record. Therefore, midcap funds are better suited for investors who are comfortable with higher levels of risk and can withstand market fluctuations.
Midcap mutual funds offer investors significant potential for capital appreciation while still maintaining a level of stability compared to smaller, more volatile smallcap stocks. These funds provide a balance between growth potential and manageable risk. However, midcap funds are slightly riskier than largecap funds.
Also read: Budget 2025: Mutual fund industry pushes for return of indexation benefits, tax relief on debt funds
Now before we share with you the list of the funds, do note that this is based on historical returns. And there is no guarantee that future returns will at all match the historical returns. If at all, the information that follows should give you a sense of what is possible when things go right with midcap funds.
Top 5 midcap mutual funds and their 5-year returns
- Quant Mid Cap Fund – Regular
Lumpsum return (5 years): 29.44%
Total return on investment of Rs 1 lakh: Rs 3,63,890
Total profit: Rs 2,63,890
SIP return (5 years): 26.51%
Total value of Rs 10,000 SIP: Rs 11,55,106
Launch date: 9 March 2001
AUM: Rs 8,891 crore
- Motilal Oswal Midcap Fund –
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