Best Mid Cap Funds

Best Mid Cap Funds
Best Mid Cap Funds

Mutual Funds
by 5paisa Research Team Last Updated: Dec 10, 2022 - 11:30 am 9.9k Views

By now you would be familiar that every Mutual Fund has an underlying asset that generates “RETURNS’’. For example, Gold is the underlying asset of Gold Mutual Funds. Similarly, in the case of Midcap Mutual Funds, the underlying asset is the Mid-sized companies. That is, fund managers use the money invested by investors in mid-cap funds to buy stocks of mid-sized companies. Over time, the best midcap funds have the potential to offer higher returns. Before going into more details,

Check out these top-performing Midcap Funds that you can invest in:

Fund Name 3Y Annualised Returns  Min SIP Amt
Quant Mid Cap Fund 38% Rs.1,000/-
SBI Magnum Midcap Fund 30% Rs.500/-
Mirae Asset Midcap Fund 27% Rs.1000/-
Kotak Emerging Equity Fund 27% Rs.1000/-


Now, let us go through the specifics of the above-mentioned funds for a better understanding:

1. Quant Mid Cap Fund

An Equity Scheme launched by Quant Mutual Fund & managed by Mr. Sanjeev Sharma.. The fund tracks the NIFTY’s Midcap Total Return Index & has a category average return of 26.08% p.a. in last three years. Whereas, this fund has given a 3Y annualized return of 37.62%.

2. SBI Magnum Midcap Fund

An Equity Scheme launched by SBI Mutual Fund and managed by Ms. Sohini Andani. This fund has a category average returns of 26.08%  p.a. over the last three years and tracks the NIFTY Midcap Total Return Index. In contrast, this fund has  3-year annualized returns of 30.37%.

3. Mirae Asset Midcap Fund

An Equity scheme launched by Mirae Asset Mutual Fund and managed by Mr. Ankit Jain. The fund tracks the NIFTY Midcap Total Return Index & has category returns of 26.08% p.a. in the last three years. Whereas, this fund has given a 3Y annualized return of 27.87%.

4. Kotak Emerging Equity Fund

An Equity Scheme launched by Kotak Mutual Fund and managed by Mr.Pankaj Tibrewal. This fund has a category average return of 26.08% p.a. over the last three years and tracks the NIFTY Midcap Total Return Index. In contrast, this fund has a 3-year annualized return of 27.24%.

So, are you curious to know how these funds have been chosen? In this article, we’ll discuss what Mid Cap Funds are, how they vary from others & and how can you pick the top Mid Cap Funds for yourself!

What are Mid Cap Funds?

As the name suggests, Mid Cap Funds are Mutual Funds that comprises of Midcap Companies. But how would you know that a particular company is a Mid-sized business? 

For this purpose, SEBI has categorized companies as per their market capitalizations. The companies which are ranked from 101 to 250 are categorized as Mid Cap Companies! Further, it’s important to note that when we talk about Mid-sized companies, we are not talking about startups or unknown companies. These include well-known businesses like TVS Motors, Voltas, and Godrej, among others. In the growth era of the economy, these companies grow faster than large companies as the value of mid-cap funds at the time of your purchase could be much lower than that of large caps.

Hence, these companies tend to generate higher returns as they grow over a period of time!

What traits do mid-cap funds have?

Following are some of the noteworthy traits of MidCap Funds:

1. Asset Allocation: If you’re wondering what percentage of a Mid Cap Fund's capital will be invested in Mid-Sized Companies? Then, here’s the answer!  The SEBI mandates Midcap Funds to invest at least 65% of their capital in Mid-Sized Companies. The remainder can be allocated in Debt or fixed-income securities.

2. Risk to Return Ratio: The best Midcap mutual funds have a moderate risk/return ratio. These funds may be the best choice for you if you're willing to take moderate risks while investing.

Who can invest in these funds?

As we all know, large companies or blue-chip companies are not built overnight! They may have taken a certain time to grow & outperform in the market. Whereas, as Mid Cap companies are in their growing phase, one should atleast hold onto these funds for seven to ten years to truly reap its benefits. In short, patience is the keyword to make the most of your Midcap fund investments!

What are the Benefits of investing in top Midcap Funds?

1. Low Ticket Size: You can begin a Mutual Fund SIP in MidCap Funds starting at just Rs.500. Thus, anyone looking to invest in these funds can do so at a reasonable cost!

2. Diversification: Mutual Funds, anyway, will assist you to diversify the risk by investing in a group of stocks. However, you can diversify your investments effectively by investing across funds & sectors as per your financial need!

3. Transparency: Mutual Funds are mandated to disclose important information about their investments. This includes NAVs, expense ratio & their month-end portfolios. Thus, getting better transparency can make it easier for you to pick the best Midcap fund.

How are these funds taxed?

In the end, your real gains are the post-tax returns of your investments! And in order to determine that, you must be familiar with the taxes that you would have to pay. The taxation of Mid Cap funds is based on how long you hold the investments:

a) for Less than 1 Year: If you sell your investments within a year, the gains from your investments will be classified as Short Term Capital Gains (STCG). Such gains will be taxed at a rate of 15% plus education cess.

b) for 1 Year or Above: If you sell your investments after a year or more, the gains from your investments will be classified as Long term Capital Gains (LTCG). Such gains are tax-free up to ₹1 Lakh in a financial year. Beyond that, these gains are taxed at a rate of 10% plus education cess.

Wrapping it up

Lastly, In a growing country like India, Midcap Funds can be a great idea to include in a portfolio & increase your portfolio’s potential returns! However, as an investor, it is important for you to go through the ins & outs of a fund before making any investment. Of course, your investment must also align with your holding period, ability to take risks, and investing goal.
Happy Investing!

How do you rate this blog?

Fill in your details below:

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.


Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

Open Free Demat Account

Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number