1. Motilal Oswal Midcap 30 Fund

This top mid-cap fund was launched in 2014 and has an AUM of ₹2,751 crores. It can invest in a maximum of 30 stocks and currently has 25 stocks in its portfolio including Phoenix Mills, Gujarat Gas, and others.  

• Fund name: Motilal Oswal Midcap 30 Fund
• Inception: 24-02-2014
• AUM: ₹2,751 crores
• 3-year returns: 21.25%
• 5-year returns: 10.58%
• Expense ratio: 2.03%

If you had invested ₹1,00,000 in this mid-cap fund, you would have a profit of ₹77,156 after 3 years and ₹68,505 in 5 years based on the historical data mentioned above. Calculate your returns here.

2. PGIM India Midcap Opportunities Fund 

This mid-cap fund was launched in 2013 and manages assets worth ₹5,012 crores. The fund has 51 stocks in its portfolio including the likes of Dalmia Bharat, TVS Motor Company, and others. 

• Fund name: PGIM India Midcap Opportunities Fund 
• Inception: 02-12-13
• AUM: ₹5,012 crores
• 3-year returns: 31.50%
• 5-year returns: 15.00%
• Expense ratio: 2.00%

If you had invested ₹1,00,000 in this mid-cap fund, you would have a profit of ₹1,24,809 after 3 years and ₹1,01,135 in 5 years based on the historical data mentioned above. Calculate your returns here.

3. Sundaram Large And Mid Cap Fund

This is one of the top large and mid cap funds that has been on the market for 15 years. It manages ₹4,944 crores in assets and holds 73 stocks like Astral, ICICI Bank, and more. 

• Fund name: Sundaram Large And Mid Cap Fund
• Inception: 27-02-2007
• AUM: ₹4,944 crores
• 3-year returns: 15.60%
• 5-year returns: 10.08%
• Expense ratio: 1.86%

If you had invested ₹1,00,000 in this large and mid-cap fund, you would have a profit of ₹56,089 after 3 years and ₹61,051 in 5 years based on the historical data mentioned above. Calculate your returns here. 

4. Kotak Emerging Equity Fund

This is the final entry to our list of best mid-cap funds to invest in. It was launched in 2007 and manages ₹19,303 crores. Its portfolio includes 70 stocks with the likes of Thermax, Schaeffler India, and more.

• Fund name: Kotak Emerging Equity Fund
• Inception: 30-03-2007
• AUM: ₹19,303 crores
• 3-year returns: 21.98%
• 5-year returns: 12.54%
• Expense ratio: 1.80%

If you had invested ₹1,00,000 in this mid-cap fund, you would have a profit of ₹81,584 after 3 years and ₹84,243 in 5 years based on the historical data mentioned above. Calculate your returns here.

1. Potentially High Returns

Top mid-cap funds are known to generate better returns than large-cap funds. The reason is the potential for growth that mid-cap stocks have. They’re relatively well-known companies but not industry leaders.

This allows them to be aggressive and make fluid business decisions to generate relatively high returns. Furthermore, mid-cap companies have the potential to become large-caps in the future. You can consult a Cube Wealth Coach or download a Cube Wealth App.

2. Relative Stability 

While mid-cap funds may not be as stable as large-cap funds, they have the edge over their small-cap counterparts. Mid-cap companies have access to more capital than small-caps. 

Their market cap is significantly higher as well. That’s why the best mid-cap mutual funds are known to provide better stability than small-cap funds.  

3. Diversification

A mid-cap fund doesn’t give you access to a single stock. Rather, it gives you access to a basket of mid-cap stocks along with other assets in lesser proportion. 

What this means is that you don’t have to pore over charts and wreck your brains over mid-cap stocks. A professional would do that for you. But does this mean you should pick mid-cap funds on your own? 

Watch this video to know more.

1. Over/Under Diversification

Contrary to popular belief, you may not need to own multiple mid-cap funds to achieve your financial goals. Rather, a handful of the best mid-cap funds can help you create solid wealth over the long term. 

Most mutual fund investors land up in one of two scenarios:

• Invest in too many mutual funds with overlapping portfolios
• Invest in too many mutual funds, over diversifying, and incurring a higher investment cost

Instead, it’s optimal to consult a trained financial professional who can help you invest in the best mid-cap funds based on your financial goals and risk profile. 

2. High Volatility

Most stocks are prone to volatility while some are more volatile than others. This is true for mid-cap stocks, especially when compared to large-cap stocks. 

Mid-cap companies aren’t large enough to smoothly handle unfavourable market conditions. That’s represented by their stock and the mid-cap mutual funds that invest in it experience the brunt of it too.

3. High Investment Cost

Equity funds are generally known to carry a higher investment cost. That’s because of the management fees charged by AMCs for handling the day to day business of the fund.

Investors must thus pay attention to the number of mid-cap funds, and on a broader level, the number of equity funds they hold. You can read more about this here. 

1. Your Risk Appetite

Mid-cap funds are volatile and may not be suitable for every investor’s risk profile. Considering mid-cap funds fall under the aggressive category, it’s best to understand your risk profile first before investing. 

The best way to get an idea of your risk profile is to:

1. Take a risk quiz and let Cube’s Perfect Portfolio feature suggest investments
2. Speak to a Wealth Coach who will understand your life goals, risk profile, and more to suggest investments  

2. Your Financial Goals

Investing is all about achieving goals that range from the short term to the long term. Similarly, you must analyze financial goals to see whether mid-cap funds can help you achieve them. 

For example, equity funds like mid-cap funds are suitable for the long term (5+ years). So the question is, do you have long term goals? For more information on defining investment goals, read this.  

3. Quality & Track Record

Considering there are hundreds of mid-cap funds and thousands of mutual funds in the market, it’s important to understand that not all funds will be good or bad. 

Evaluating each fund on multiple criteria is necessary to ensure that you choose the right ones. This means going beyond a mid-cap fund’s star ratings and into details like the track record, turnover, and more.

Doing this may be difficult for working professionals. That’s why you could benefit from a service like Cube that gives you access to mid-cap funds that can work for you. Download Cube To Know More.

1. How do mid-cap mutual funds work, and why are they connected to the Nifty Midcap 150 index?

Ans. Mid-cap mutual funds invest in stocks from the Nifty Midcap 150 index, which represents mid-sized companies in India. These mutual funds aim to benefit from the growth potential and relative stability of mid-cap stocks.

2. Why are mid-cap companies considered a sweet spot between large-cap and small-cap companies?

Ans. Mid-cap companies typically have a market capitalization ranging from ₹5,000 crores to ₹20,000 crores, which positions them between larger, established companies (large-cap) and smaller, emerging businesses (small-cap).

3. What factors should I consider when choosing the best mid-cap mutual fund for my investment goals?

Ans. When selecting a mid-cap mutual fund, consider factors such as historical performance, expense ratios, the fund's holdings, and your own investment objectives and risk tolerance.

4. What are the potential risks associated with investing in mid-cap mutual funds?

Ans. Investing in mid-cap mutual funds comes with certain risks, including the possibility of over-diversification, higher volatility compared to large-cap funds, and associated investment costs.