5 Mid Cap Funds with the Highest Returns in the Last 5 Years

Mid-cap and small-cap stocks have always been a double-edged sword for investors.

Their rallies can be sharp and rewarding, but they are often followed by deep corrections and prolonged consolidation phases.

By regulation, mid-cap funds are required to invest at least 65% of their assets in mid-sized companies. This mandate makes them suitable only for investors who can stomach volatility and stay invested for the long haul.

Those who did just that over the last five years have been handsomely rewarded. The rally that began in 2020 has created meaningful wealth, even as markets went through bouts of corrections and pauses.

During this period, the Nifty Midcap 150 Total Return Index and Nifty Smallcap 250 Index have delivered gains of nearly 238% and 202%, respectively.

Amid this backdrop, several mid-cap mutual funds have captured the rally effectively, with some even outperforming their benchmarks through disciplined stock selection and long-term conviction.

Here's a look at five mid-cap funds that have delivered the highest returns over the past five years...

#1 Motilal Oswal Midcap Fund

Motilal Oswal Midcap Fund was launched in February 2014.

The fund's investment strategy is to generate long-term capital growth by investing in quality mid-cap companies with competitive advantages and growth potential.

As of 31 August 2025, the fund's AUM was Rs 347.8 billion (bn). The scheme's expense ratio (Direct Plan) is 0.69% per annum, and an exit load of 1%, if redeemed on or before 365 days.

What sets this fund apart is the strong promoter commitment, with investments of Rs 17.7 billion (as of 31 January 2024)- a clear display of skin in the game.

The company's equity allocation is 97.39%. The remaining (2.61%) is cash and cash equivalents.

The fund holds a concentrated portfolio of just 19 stocks. The top 10 stocks account for 77.82% of its portfolio, with Dixon Technologies having the highest weight of 10.08%, followed by Coforge (9.79%), Trent (9.14%), Eternal (9.03%), and Kalyan Jewellers (8.7%).

Its portfolio allocation is diversified, with IT-Software contributing 19.21%, followed by Consumer Discretionary (18.77%), Retailing (18.17%), Industrial Products (12.71%), and Fintech (8.68%).

The portfolio turnover ratio of this fund is on the higher side at 133%. However, it is still lower than the category average of 210%.

With this approach, the fund has delivered a return at a 34.94% compounded annual growth rate (CAGR) during the last 5-years (ending 2 October 2025).

This performance is nearly double the 17.94% CAGR delivered by the category average and the Nifty Midcap 150 Total Return Index (TRI) (29.5%), underscoring its consistent alpha generation.

The scheme has outperformed with higher volatility, with a standard deviation of 17.20, compared to Nifty Midcap 150 TRI (15.43), and category average (15.43)

However, it mitigates the downside risk, as indicated by the Sortino ratio of 0.65, which is a little higher than the Nifty Midcap 150 (0.62) and category average (0.64).

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.36, versus a category average of 0.33, and Nifty Midcap 150 (0.31).

#2 Edelweiss Mid-cap Fund

Edelweiss Midcap Fund was launched in January 2013. As of 31 August 2025, the fund AUM stands at Rs 112.97 bn. Its expense ratio (as of 30 September 2025) stood at 0.38%.

The fund's investment strategy is to generate long-term capital appreciation from a portfolio of mid-cap companies' equity and equity-related securities.

The fund follows a well-diversified approach, holding 85 stocks across market capitalisations. Mid-caps form the core with a 68.97% allocation, while large caps (18.24%) and small caps (12.79%).

The top 10 stocks account for 25.02% of its portfolio, with Persistent Systems having the highest weight of 3.11%, followed by Max Healthcare (3.05%), Coforge (2.91%), Marico (2.60%), and PB Fintech (2.45%).

The fund holds 24.91% of the financial sector, followed by industrial (15.31%), consumer discretionary (14.73%), healthcare (10.66%), and materials (9.98%).

The portfolio turnover ratio is lower at 43%, which is lower than the category average of 210%.

The fund has delivered a CAGR return of 32.46% over the last 5 years, outperforming the Nifty 150 TRI (29.5%) and category average (27.94%).

The fund exhibits slightly higher volatility than the benchmark, with a standard deviation of 15.79, compared to Nifty Midcap 150 TRI (15.43) and the category average (14.68).

However, it mitigates the downside risk well, with a Sortino ratio of 0.7, which is higher than both the category average (0.64) and Nifty Midcap 150 (0.62).

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.35, versus a category average of 0.33, and Nifty Midcap 150 (0.31).

#3 Nippon India Growth Mid-cap Fund

Nippon India Growth Mid Cap Fund was launched in October 1995, which makes it one of the oldest mid-cap schemes.

As of 31 August 2025, the scheme's AUM stood at Rs 383.86 bn, with an expense ratio of 0.75%.

The primary investment objective of the scheme is to achieve long-term growth of capital by investment in equity and equity-related securities through a research-based investment approach.

The portfolio is well-diversified, holding 95 stocks across market capitalisations. Mid-caps form the core with a 73.76% allocation, while large caps (19.37%), and small caps (6.87%).

The top 10 stocks account for 23.05% of its portfolio, with Fortis Healthcare having the highest weight of 3.22%, followed by BSE (2.79%), Cholamandalam Financial (2.4%), Persistent Systems (2.27%), and Voltas (2.22%).

The fund holds 23.46% in the financial sector, followed by industrial (18.18%), consumer discretionary (17.55%), healthcare (11.63%), and technology (8.02%).

The portfolio turnover ratio is quite low at 7%, compared to the category average of 210%. This indicates that the fund follows a buy-and-hold strategy and rarely churns its portfolio.

The fund has delivered a CAGR return of 31.21% over the last 5 years, outperforming the Nifty 150 TRI (29.5%) and category average (27.94%).

The fund exhibits slightly lower volatility, with a standard deviation of 15.23, compared to Nifty Midcap 150 TRI (15.43) and the category average (14.68).

It also mitigates the downside risk well, with a Sortino ratio of 0.74, which is higher than both the category average (0.64) and Nifty Midcap 150 (0.62).

It also outperforms in risk-adjusted returns with a Sharpe ratio of 0.36, versus a category average of 0.33, and Nifty Midcap 150 (0.31).

#4 HDFC Mid-cap Fund

HDFC Mid Cap Fund was launched in January 2013. It is an open-ended equity scheme that aims to build a portfolio of mid-cap companies with reasonable growth prospects, strong financials, sustainable business models, and acceptable valuations.

As of 31 August 2025, the scheme's AUM stood at Rs 831.05 bn, with an expense ratio of 0.72%.

The scheme portfolio is well-diversified, holding 72 stocks across market capitalisations. Equities make up 93.02% of the portfolio, while 6.98% is maintained in cash and cash equivalents.

The top 10 stocks account for 32.1% of its portfolio, with Max Financial having the highest weight of 4.94%, followed by Balkrishna Industries (3.59%), Coforge (3.2%), AU Small Finance Bank (3.04%), and Fortis Healthcare (2.96%).

The fund holds 24.21% in the financial sector, followed by consumer discretionary (14.34%), technology (13.15%), healthcare (11.74%), and industrials (9.82%).

This scheme's portfolio turnover ratio is also low at 15.72%, compared to the category average of 210%. This indicates that the scheme acquires shares with a buy-and-hold approach.

The fund has delivered a CAGR return of 30.99% over the last 5 years, outperforming the Nifty 150 TRI (29.5%) and category average (27.94%).

The fund exhibits the relatively low volatility, with a standard deviation of 13.72, compared to Nifty Midcap 150 TRI (15.43) and the category average (14.68).

It also mitigates the downside risk strongly, with a Sortino ratio of 0.88, which is higher than both the category average (0.64) and Nifty Midcap 150 (0.62).

The scheme also outperforms in risk-adjusted returns with a Sharpe ratio of 0.41, versus a category average of 0.33, and Nifty Midcap 150 (0.31).

#5 Union Mid-cap Fund

Union Mid Cap Fund is a new scheme that was launched in March 2020. The scheme's stock selection strategy revolves around identifying a mix of high-growth opportunities and attractive value bargains.

As of 31 August 2025, the scheme's AUM stood at Rs 15.08 bn, with an expense ratio of 0.73%.

The portfolio is well-diversified, holding 72 stocks across market capitalisations. Mid-cap makes up 67.61% of the portfolio, large-cap (15.89%), and small-cap (13.91%).

The top 10 stocks account for 24.98% of its portfolio, with Max Financial having the highest weight of 3.39%, followed by The Federal Bank (3.09%), Fortis Healthcare (2.62%), Dixon Technologies (2.44%), and Cummins India (2.38%).

The fund holds 20.39% of the financial sector, followed by consumer discretionary (12.58%), industrials (18.07%), technology (11.4%), and healthcare (11.33%).

Being a new scheme, its portfolio turnover ratio is higher than peers at 132%, but lower than the category average of 210%.

The fund has delivered a CAGR return of 30.43% over the last 5 years, outperforming the Nifty 150 TRI (29.5%) and category average (27.94%).

The scheme volatility, measured by a standard deviation of 13.72, is broadly in line with the Nifty Midcap 150 TRI's 15.43, and is lower than the category average of 14.68.

Its Sortino ratio stands at 0.52, which is lower than both the category average (0.64) and the Nifty Midcap 150 TRI (0.62), indicating relatively weaker downside risk-adjusted performance.

The scheme's Sharpe ratio stands at 0.28, which is lower than the category average of 0.33 and the Nifty Midcap 150 TRI (0.31). This indicates relatively lower risk-adjusted performance.

Source: ACE MF

Bottomline

The mid-cap space has once again proved that patience pays.

While volatility remains an inseparable part of the journey, investors with discipline and a long-term approach have reaped significant gains.

Staying selective and focusing on consistent performers among mid-cap funds could help balance risk and reward effectively in the years ahead.

#Table Note: Rolling period returns are calculated using the Direct Plan-Growth option.
Returns over 1 year are compounded annualised.
Standard Deviation indicates the risk, while the sharpe ratio and sortino ratios measure the Risk-Adjusted Return.
They are calculated over 3 years, assuming a risk-free rate of 6% p.a.
The category average of all midcap mutual funds considered.
Please note that returns here are historical returns.
*The top funds here in the table are based on past returns over 5-year returns.
The list of schemes is not exhaustive.
Past performance is not an indicator of future returns.
The securities quoted are for illustration only and are not recommendatory.
Speak to your investment advisor for further assistance before investing.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.

Disclaimer: This write-up is for information purposes and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme-related documents carefully. Registration granted by SEBI, Membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.