Mid-Cap Mutual Funds are leading the charge with double-digit returns
Mid-cap mutual funds continue to offer an attractive balance between growth potential and relative stability. As of April 2025, several mid-cap schemes have demonstrated strong performance, backed by India’s robust domestic growth story, favorable regulatory environment, and increasing retail participation. These funds invest primarily in companies ranked between 101st and 250th in market capitalization, a segment often associated with agility and innovation.
Understanding the Appeal of Mid-Cap Mutual Funds
Mid-cap funds bridge the gap between the high-growth, high-risk nature of small caps and the stability of large-cap equities. These funds typically outperform during economic expansions, as mid-sized businesses grow rapidly by capitalizing on sectoral tailwinds and increased consumer demand. With the Indian economy expected to maintain a GDP growth of over 6.8% in FY2025, mid-cap funds are well-positioned to generate superior returns.
Selection Criteria for the Top Mid-Cap Funds in April 2025
Fund selection in April 2025 focuses on the following factors:
Consistent long-term performance (3-year and 5-year CAGR returns)
Experienced fund management with proven track records
Strong portfolio composition with sectoral diversification
Lower expense ratios and efficient risk management
AUM within an optimal range to ensure agility without liquidity constraints
Based on these criteria, the following mid-cap mutual funds stand out.
1. Axis Midcap Fund
NAV (Regular Growth): ₹82.65
3-Year CAGR: 22.4%
AUM: ₹18,790 crore
Axis Midcap Fund continues to lead the pack with superior stock selection and a disciplined investment strategy. The fund allocates capital toward fundamentally sound businesses across financial services, consumer goods, and industrial manufacturing. Focused stock picking and low churn rate have contributed to its steady performance, even during market volatility.
Portfolio allocation includes stocks like Page Industries, PI Industries, and Bharat Forge. The fund management emphasizes quality, capital efficiency, and high return on equity.
2. Kotak Emerging Equity Fund
NAV (Regular Growth): ₹97.35
3-Year CAGR: 20.8%
AUM: ₹32,200 crore
Kotak Emerging Equity Fund offers exposure to a wide range of mid-cap opportunities. With a diversified approach, the fund spreads risk across over 70 stocks. Holdings include Supreme Industries, Schaeffler India, and Indian Hotels Company.
Its large AUM hasn’t hampered agility due to the fund’s strategy of maintaining sectoral balance and avoiding concentration risk. The fund consistently remains in the top quartile for performance and risk-adjusted returns.
3. Nippon India Growth Fund
NAV (Regular Growth): ₹2,120.75
3-Year CAGR: 19.5%
AUM: ₹18,450 crore
One of the oldest mid-cap funds in the Indian market, Nippon India Growth Fund blends mid-cap and selective small-cap exposure for higher alpha. The fund takes a bottom-up approach, identifying businesses with long-term scalable models.
Stocks such as IDFC First Bank, Tube Investments, and Aegis Logistics dominate its portfolio. Despite occasional volatility, the fund rewards patience through strong compounding over time.
4. HDFC Mid-Cap Opportunities Fund
NAV (Regular Growth): ₹137.80
3-Year CAGR: 18.7%
AUM: ₹38,900 crore
HDFC Mid-Cap Opportunities Fund maintains a conservative investment philosophy, favoring high-quality companies with robust balance sheets. The fund avoids thematic bets and maintains sectoral diversification.
Top holdings include Max Financial Services, Sundaram Finance, and Cummins India. The fund’s relatively low portfolio turnover reflects a long-term conviction in its chosen stocks, which has helped it navigate market downturns effectively.
5. SBI Magnum Midcap Fund
NAV (Regular Growth): ₹194.25
3-Year CAGR: 20.1%
AUM: ₹9,630 crore
SBI Magnum Midcap Fund consistently delivers strong returns through disciplined research and prudent risk control. It tilts toward sectors such as chemicals, auto ancillaries, and consumer durables.
The fund has benefited from early investments in emerging leaders within the mid-cap space. Key holdings include Elgi Equipments, KNR Constructions, and Vinati Organics. Its smaller AUM compared to peers ensures higher flexibility in rebalancing.
6. Motilal Oswal Midcap Fund
NAV (Regular Growth): ₹59.85
3-Year CAGR: 21.3%
AUM: ₹6,580 crore
This fund follows a concentrated approach with a focused portfolio of 25–30 high-conviction stocks. Motilal Oswal’s investment philosophy centers around quality at a reasonable price (QARP), making it suitable for aggressive investors seeking higher alpha.
The portfolio includes companies like AU Small Finance Bank, Dixon Technologies, and Gland Pharma. Despite higher volatility, long-term investors have been rewarded with strong growth.
Sector Trends Fueling Mid-Cap Growth in 2025
Several macro and sectoral trends support the performance of mid-cap companies in 2025:
Domestic Manufacturing Boom: With the PLI scheme in full swing, mid-cap industrials and exporters are witnessing strong revenue growth.
Consumer Discretionary Rebound: Rising rural demand and festive season spending have boosted earnings in textiles, electronics, and branded apparel.
Auto Ancillaries and EV Supply Chains: Emerging auto-tech firms in the mid-cap universe are benefiting from India’s EV transition.
Technology and SaaS Expansion: Mid-cap IT companies are rapidly expanding in niche areas such as data analytics, AI solutions, and cloud infrastructure.
Risk Considerations While Investing in Mid-Cap Funds
Mid-cap funds carry higher volatility than large-cap funds. During market corrections, these funds can suffer deeper drawdowns. Liquidity in some mid-cap stocks remains thin, making exit during market stress difficult. Furthermore, over-diversification or excessive AUM can reduce alpha generation in some cases.
Disciplined investing, backed by periodic performance reviews, helps mitigate risks associated with mid-cap exposure. Investors must consider investment horizon, risk appetite, and market cycles while selecting funds.
Performance Summary: Top Mid-Cap Funds (April 2025)
| Fund Name | NAV (₹) | 3-Yr CAGR | AUM (₹ Cr) |
| Axis Midcap Fund | 82.65 | 22.4% | 18,790 |
| Kotak Emerging Equity Fund | 97.35 | 20.8% | 32,200 |
| Nippon India Growth Fund | 2,120.75 | 19.5% | 18,450 |
| HDFC Mid-Cap Opportunities | 137.80 | 18.7% | 38,900 |
| SBI Magnum Midcap Fund | 194.25 | 20.1% | 9,630 |
| Motilal Oswal Midcap Fund | 59.85 | 21.3% | 6,580 |
Mid-cap mutual funds remain a compelling investment avenue in April 2025 for those seeking higher long-term growth. With favorable macroeconomic tailwinds, improved earnings visibility, and fund managers sharpening their stock-picking strategies, the mid-cap segment offers strong potential. A diversified approach, focusing on well-managed funds with consistent performance, ensures a smart allocation strategy in any portfolio aiming for capital appreciation.
