The Indian equity market has demonstrated remarkable growth in 2024, driven by strong domestic participation and economic resilience. Mid-cap stocks, in particular, have delivered outstanding returns, outperforming other segments of the market. As we enter 2025, investors with a high-risk appetite can consider midcap mutual funds for their long-term wealth creation goals.
What Are Midcap Mutual Funds?
Midcap mutual funds invest primarily in mid-sized companies that rank between 101 and 250 based on market capitalization. These companies have the potential to grow into large-cap companies, offering investors high growth prospects over the long term. At least 65% of the total assets in midcap mutual funds are invested in mid-cap stocks.
Top 5 Mid Cap Fund to Invest in 2025
Here are the top 5 midcap mutual funds to consider for 2025 based on their recent performance and AUM size:
| Fund Name | AUM(Cr.) | 1 Year Return (%) | 3 Year Return (%) | 5 Year Return (%) |
| Motilal Oswal Midcap Fund | 22,898 | 60.18 | 36.46 | 34.13 |
| Invesco India Midcap Fund | 5,863 | 48.60 | 26.15 | 29.18 |
| HSBC Midcap Fund | 11,912 | 45.76 | 26.57 | 26.41 |
| Edelweiss Mid Cap Fund | 8,280 | 43.66 | 26.96 | 31.47 |
| Kotak Emerging Equity Fund | 52,049 | 38.64 | 23.74 | 28.17 |
| JM Midcap Fund | 1,696 | 37.08 | – | – |
Motilal Oswal Midcap Fund
- AUM: ₹22,898 Cr
- 1-Year Return: 60.18%
- 3-Year Return: 36.46%
- 5-Year Return: 34.13%
Motilal Oswal Mid cap Fund has been a standout performer, delivering consistent returns across multiple time frames. The fund follows a concentrated stock-picking strategy, focusing on quality mid-cap companies with robust growth potential. Its ability to identify high-growth opportunities has resulted in exceptional performance, making it a top choice for investors.
Invesco India Midcap Fund
- AUM: ₹5,863 Cr
- 1-Year Return: 48.60%
- 3-Year Return: 26.15%
- 5-Year Return: 29.18%
Invesco India Mid cap Fund has maintained a balanced portfolio, investing in emerging mid-cap leaders across sectors. The fund’s disciplined investment strategy and focus on high-quality stocks have resulted in competitive returns, making it a reliable option for mid-cap exposure.
HSBC Midcap Fund
- AUM: ₹11,912 Cr
- 1-Year Return: 45.76%
- 3-Year Return: 26.57%
- 5-Year Return: 26.41%
HSBC Mid cap Fund offers investors a diversified portfolio of mid-cap companies, striking a balance between growth and risk. Its consistent performance over the years reflects the fund manager’s ability to capitalize on market opportunities while managing volatility effectively.
Edelweiss Mid Cap Fund
- AUM: ₹8,280 Cr
- 1-Year Return: 43.66%
- 3-Year Return: 26.96%
- 5-Year Return: 31.47%
Edelweiss Mid Cap Fund stands out for its focus on mid-sized companies with scalable business models. The fund has delivered strong returns over the last five years, highlighting its ability to navigate market fluctuations while delivering superior risk-adjusted returns.
Kotak Emerging Equity Fund
- AUM: ₹52,049 Cr
- 1-Year Return: 38.64%
- 3-Year Return: 23.74%
- 5-Year Return: 28.17%
Kotak Emerging Equity Fund, with its large AUM, has been a trusted name in the mid-cap segment. The fund adopts a bottom-up approach to identify emerging mid-cap companies with long-term growth potential. Its stable performance makes it an excellent option for investors seeking mid-cap exposure.
Benefits of Investing in Midcap Mutual Funds
- High Growth Potential: Mid cap companies are often in their growth phase and have significant potential to deliver higher returns compared to large-cap funds.
- Diversification: Investing in mid cap funds allows portfolio diversification across sectors and industries.
- Better Risk-Reward Balance: Mid cap funds strike a balance between the stability of large-cap funds and the aggressive growth of small-cap funds.
- Long-term Wealth Creation: Mid cap funds have historically outperformed in bullish markets, making them ideal for long-term investors.
Why Should You Consider Midcap Mutual Funds in 2025?
The Indian economy is witnessing robust growth, with midcap companies playing a significant role in driving this momentum. Midcap stocks have demonstrated resilience and outperformed large-cap counterparts in recent years. With the Nifty Midcap index gaining substantially year-to-date, investing in midcap funds provides an excellent opportunity to benefit from the growth potential of emerging businesses.
However, investors should be mindful of short-term volatility and have a long-term investment horizon to maximize returns. Midcap mutual funds are ideal for investors with a high-risk appetite looking for wealth creation over 5-7 years.
Conclusion
The Top 5 Midcap Mutual Funds for 2025—Motilal Oswal Midcap Fund, Invesco India Midcap Fund, HSBC Midcap Fund, Edelweiss Mid Cap Fund, and Kotak Emerging Equity Fund—have shown consistent performance and growth. These funds offer investors an opportunity to diversify their portfolio and capitalise on the growth potential of mid-sized companies.
To make the most of your midcap mutual funds investment, choosing the best SIP platform can help you systematically invest and reduce market timing risks. Additionally, using a reliable SIP calculator can help you plan your investments effectively and achieve your financial goals.
Investors are advised to align their investments with their financial goals, risk appetite, and investment horizon while considering midcap mutual funds for their portfolio in 2025.
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