Midcap mutual funds have turned out to be wealth creators for investors in the last few years. These funds invest in medium-sized companies that have strong growth potential and have historically outperformed large-cap peers in bullish markets. In this article, we deep dive into the top-performing midcap mutual funds in India that generated an impressive 267% to 365% absolute returns over the last five years.
Earlier, we have written about 6 Best Value Mutual Funds That Outperformed with 218% to 244% Returns in 5 Years, which attracted huge investor interest. Now, let us check how midcap mutual funds have performed in recent years.
What Are Midcap Mutual Funds?
Midcap mutual funds invest primarily in companies ranked between 101st and 250th in terms of market capitalization. These companies usually have a strong business model, potential to become large caps, and can generate higher returns compared to large caps over the long term.
Key Features:
- Focus on medium-sized companies with strong growth potential
- Higher return potential compared to large-cap funds
- Suitable for investors with a medium to long-term horizon
- Carry higher volatility compared to large-cap funds
List of Top 6 Midcap Mutual Funds with 5-Year Absolute Returns
| Mutual Fund | 5-Year CAGR | 5-Year Absolute Returns | 1 Lakh Investment Would Have Turned Into |
|---|---|---|---|
| Motilal Oswal Midcap Fund | 34.9% | 365% | ₹4.65 Lakhs |
| Edelweiss Mid Cap Fund | 30.6% | 280% | ₹3.80 Lakhs |
| Nippon India Growth Mid Cap Fund | 29.9% | 275.8% | ₹3.76 Lakhs |
| HDFC Mid Cap Fund | 29.7% | 269% | ₹3.69 Lakhs |
| Invesco India Mid Cap Fund | 29.3% | 275.8% | ₹3.76 Lakhs |
| Quant Mid Cap Fund | 29.2% | 267% | ₹3.67 Lakhs |
Data as of 20-Sep-2025
Deep Dive into Top 6 Midcap Mutual Funds in the Last 5 Years
#1 – Motilal Oswal Midcap Fund
Objective: Invests in mid-sized companies with strong growth opportunities, aiming to deliver superior returns.
Annualised Returns:
- 1 Year: 2.3%
- 2 Years: 30.8%
- 3 Years: 28.7%
- 5 Years: 34.9% (1 Lakh → ₹4.65 Lakhs)
- 10 Years: 19.7%
Who Can Invest:
- Investors seeking aggressive midcap exposure
- Those with a minimum 5+ year horizon
Risk Factors:
- High volatility during market downturns
- Sector concentration risks
We analysed this fund several times earlier and also on this article 12 Mutual Funds Outperformed in Last 2 Years with 75% to 118% Returns.
#2 – Edelweiss Mid Cap Fund
Objective: Focuses on quality midcap companies with strong balance sheets and growth potential.
Annualised Returns:
- 1 Year: 3.2%
- 2 Years: 28.9%
- 3 Years: 25.8%
- 5 Years: 30.6% (1 Lakh → ₹3.80 Lakhs)
- 10 Years: 19.8%
Who Can Invest:
- Investors looking for a balance of risk and return
- Suitable for SIP investors with medium to long-term goals
Risk Factors:
- Liquidity risks in smaller midcap companies
- Market corrections may impact returns significantly
This fund is among the top-1 fund in our earlier analyisis at 5 Best Midcap Mutual Funds to Invest in 2025 (Based on Rolling Returns).
#3 – Nippon India Growth Mid Cap Fund
Objective: One of the oldest midcap funds, it invests in mid-sized companies with high growth visibility.
Annualised Returns:
- 1 Year: 1.6%
- 2 Years: 24.5%
- 3 Years: 25.5%
- 5 Years: 29.9% (1 Lakh → ₹3.76 Lakhs)
- 10 Years: 19.1%
Who Can Invest:
- Investors seeking diversification beyond large caps
- Long-term investors aiming for wealth creation
Risk Factors:
- High volatility compared to large caps
- Sector and stock-specific risks
#4 – HDFC Mid Cap Fund
Objective: Aims to achieve long-term capital appreciation by investing in fundamentally strong midcap companies.
Annualised Returns:
- 1 Year: 4.1%
- 2 Years: 23.3%
- 3 Years: 26.2%
- 5 Years: 29.7% (1 Lakh → ₹3.69 Lakhs)
- 10 Years: 19.2%
Who Can Invest:
- Investors preferring a large AuM and consistent track record
- Long-term investors seeking stability with midcap exposure
Risk Factors:
- Market risk due to equity exposure
- Returns can fluctuate sharply in short term
Earlier we explored this fund among the 10 Mutual Funds That Turned ₹ 1 Lakh Into Over ₹ 10 Lakhs in 15 Years.
#5 – Invesco India Mid Cap Fund
Objective: Focuses on high-quality mid-sized businesses with sustainable earnings growth.
Annualised Returns:
- 1 Year: 9.8%
- 2 Years: 31.9%
- 3 Years: 29.3%
- 5 Years: 29.3% (1 Lakh → ₹3.76 Lakhs)
- 10 Years: 20.4%
Who Can Invest:
- Investors looking for strong SIP returns
- Those who can remain invested for 5+ years
Risk Factors:
- Higher volatility due to stock-specific bets
- May underperform in bearish phases
#6 – Quant Mid Cap Fund
Objective: A high-beta midcap fund that uses active sector rotation and tactical allocation strategies.
Annualised Returns:
- 1 Year: -11.7%
- 2 Years: 14.8%
- 3 Years: 18.2%
- 5 Years: 29.2% (1 Lakh → ₹3.67 Lakhs)
- 10 Years: 18.3%
Who Can Invest:
- Aggressive investors with high risk appetite
- Those comfortable with volatility in pursuit of higher returns
Risk Factors:
- Very high short-term volatility
- Tactical approach may not suit all investors
This fund is part of 8 MorningStar 5 Star Rated Mutual Funds to invest in 2025. However investors should be aware of Quant MF Front Running case which came up few years back. Post this many of Quant AMC MFs were underperforming. You can see the last 1 year performance where it posted negative returns.
Key Takeaways and Conclusion
Midcap mutual funds have been stellar wealth creators, delivering up to 365% absolute returns in 5 years. Motilal Oswal Midcap Fund has emerged as the top performer, followed by Edelweiss and Nippon India Midcap Funds. These schemes are ideal for investors who can withstand short-term volatility and stay invested for the long term. However, investors should align their choices with their financial goals and risk profile.
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