Best Mid Cap Mutual Funds
The Securities and Exchange Board of India (SEBI) defines mid-cap mutual funds as those that invest in companies ranked between 101st and 250th on the stock exchange. To qualify as a mid-cap fund, at least 65% of the portfolio must be allocated to equities or equity-linked instruments of these companies.
According to a report, Yes Bank, Bandhan Bank, IDFC First, HUDCO and Mazagon Dock were among the top mid-cap stocks actively traded by mutual fund houses in February 2025. If you are looking for mutual fund schemes that invest in such mid-cap stocks, this guide is for you!
Pros of Investing in Mid Cap Funds
Here are the benefits that you can reap by investing in the best mid cap mutual funds:
- The companies where the mid cap funds invest generally have high growth potential, while being subject to market volatility.
- By investing in the outlined funds, you can diversify your investment portfolio and reduce risks.
- Investing in open-ended midcap funds helps you start with a nominal amount as low as ₹500.
Things to Know While Investing in the Best Mid Cap Mutual Funds
Here are the things you need to remember while investing in the best mid cap mutual funds:
- Review the fund’s returns over 1-year, 3-year and 5-year periods. Compare its historical performance with its benchmark and assess consistency since inception.
- A higher expense ratio directly reduces your portfolio's rate of return, so evaluate this carefully before investing.
- Analyze the fund’s risk level, sectoral allocation and investment composition to understand potential volatility.
- Check the fund manager’s experience and track record to ensure your investment is in capable hands.
A Detailed Overview of Top Mid Cap Mutual Funds
Here is a detailed guide to the best mid cap funds you can choose to invest in 2025:
1. HDFC Mid Cap Opportunities Fund
If you are an investor with a moderate risk appetite, planning to invest for a horizon of 3 to 4 years, you can choose HDFC Mid Cap Opportunities Fund. You can further measure its stock performance with its benchmark Nifty Midcap 150 TRI.
- Asset Under Management: ₹67,578.59 crore approximately
- Investment Details: Equity (92.47%), Others (7.53%)
- Expense Ratio: 0.83%
- Exit Load: 1%
- Launch Date: January 2013
2. Kotak Emerging Equity Fund
Kotak Emerging Equity Fund (Direct Growth) invests 96.43% in domestic equities, wherein large cap stocks include 6.79%, mid cap stocks include 42.44% and small cap stocks include 21.45%. You can invest in this open-ended fund and measure its stock performance in future with its benchmark Nifty Midcap 150 TRI.
- Asset Under Management: ₹49,941.48 crore approximately
- Investment Details: Equity (96.43%), Others (3.57%)
- Expense Ratio: 0.45%
- Exit Load: 1%
- Launch Date: March 2007
3. Nippon India Growth Fund
Nippon India Growth Fund invests 99.39% in Indian equities. It includes large cap, mid cap and small cap stocks in 11.9%, 44.3% and 12.39% respectively. The minimum amount of investment in this open-ended fund is ₹100 for both SIP and lump sum.
- Asset Under Management: ₹30,276.31 crore approximately
- Investment Details: Equity (99.39%), Others (0.61%)
- Expense Ratio: 0.78%
- Exit Load: 1%
- Launch Date: January 2013
4. Axis Mid Cap Fund
Axis Mid Cap Fund (Direct Growth) invests 85.92% in domestic equities. This equity portfolio includes 8.97% in large cap stocks, 34.33% in mid cap stocks and 16.13% in small cap stocks. You can start your investment in this open-ended fund and measure its stock performance with the benchmark BSE Mid Cap 150 TRI.
- Asset Under Management: ₹26,087.92 crore approximately
- Investment Details: Equity (85.92%), Others (14.08%)
- Expense Ratio: 0.57%
- Exit Load: 1%
- Launch Date: January 2013
5. Motilal Oswal Mid Cap Fund
Motilal Oswal Mid Cap Fund (Direct Growth) invests 76.92% in domestic equities including 16.37% and 18.09% in small and mid cap stocks respectively. With Niket Shah, Sunil Sawant, Rakesh Shetty and Ajay Khandelwal as the fund managers, this fund has its benchmark as Nifty Midcap 150 TRI.
- Asset Under Management: ₹23,703.68 crore approximately
- Investment Details: Equity (71.68%), Others (28.33%)
- Expense Ratio: 0.68%
- Exit Load: 1%
- Launch Date: February 2014
Key Takeaway
Capital gains from the best mid cap mutual funds are subject to taxation (in the form of STCG and LTCG), based on the holding period. Such gains attract 20% STCG and 12.5% LTCG (on an amount exceeding ₹1.25 lakh) if redeemed within or after 1 year respectively. Ensure you calculate your approximate actual returns based on the charges and taxes applicable on mid cap funds to optimise your returns.
Frequently Asked Questions
1. Where do mid cap funds invest?
In India, mid cap funds need to invest a minimum of 65% in stocks of companies that rank between 101st and 250th based on the market capitalization.
2. Are mid cap funds a good investment option for the long term?
Mid cap funds are associated with high underlying risks. However, if you invest in these funds for the long term, they can potentially provide you with competitive returns. You can choose to invest in these funds to diversify your portfolio as the companies have a high potential for development.
3. How much corpus should I invest in mid cap funds?
You can start investing in mid cap funds with a nominal amount as low as ₹500. However, you can increase the amount based on your risk appetite and investment capacity.
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