Top Five Mid Cap Mutual Funds

Below is the list of Top 5 mid cap funds.

Name of Fund 5 Year Returns (p.a.) Scheme Category
DSP Midcap Fund 17.52% Mid Cap
L&T Midcap Fund16.70% Mid Cap
Aditya Birla Sunlife Midcap Fund17.20% Mid Cap
SBI Magnum Midcap Fund17.49% Mid Cap
Sundaram Midcap Fund18.98% Mid Cap
These funds invest minimum 65% of its assets in mid size companies and you should invest for a minimum time horizon of 5 years.

What are Mid Cap Funds ?

Mid-cap funds are the ones that ranks in between 101 and 250 listed on the stock exchange by full market capitalization. Each fund has a unique objective hidden behind them. Thus, fund managers advise or invest based on the investor’s objective. The main objective of a mid-cap fund is that they are growth-oriented. Meaning, the investors who have an objective of growing their investment over a period of time can consider mid-cap funds as an ideal option.

What are the main features of mid-cap Funds ?

High growth: Mid-cap funds have some traits of large-cap and small-cap funds resulting in high growth-rate. As they are neither at the initial stage nor are well-established, their growth is comparatively high.

Risk factor: Mid-cap funds have higher risk than large-cap funds and lower than small-cap funds. However, with the use of technology, an investor can easily track the performance of mid-cap funds.

Good management: As mid-scale companies are constantly growing, they have a good internal management system. This is one unique characteristic of mid-scale companies. The management, with its decision-making skills contributes towards higher growth and functioning.

Cost effective: Mid cap companies tend to yield high returns, if invested for extended periods. Since, these companies don’t fall under limelight; it can be a smart move for the investors to boost their portfolio.

What are the advantages and disadvantages of Mid Cap Funds ?


  • These companies have higher returns than large-scale companies.
  • They offer moderate risk.
  • Ideal for long-term investment.
  • Less volatile than small-cap funds.
  • High growth rate.
  • Returns can beat inflation effectively.
  • Offers diversified portfolio.


  • Higher volatility than large-cap funds.
  • Best for long-term investment.
  • Low growth rate, if checked daily or weekly.
  • Not ideal for short-term investments up to 5 years.
  • Higher risk than large-scale companies.
  • An investor can miss out on massive gains, if investment is only in mid-cap funds.

Why mid cap funds deliver more returns than large cap funds ?

Companies are either large, mid, or small-scale. All of these types have different characteristics that affect the equity-related instruments at a great extent. Large-scale companies are the market players and the well-established ones. However, mid-scale companies are in-between small and large companies. Hence, the growth rate of mid-scale companies is often higher than large-scale companies.

Large companies have a negligible scope of growth, whereas, mid-sized companies have a vast area for development. These are the established companies offering diversified portfolio and provide market a substantial part of their capital structure. The volatility level of mid-cap companies is higher than large-cap companies, thus providing higher returns.

Why should you invest in mid cap funds ?

Mid-cap funds are ideal if you are a risk-taker. They offer high returns with a diversified portfolio. There is a high probability of these companies becoming a large company. If this happens, you can yield a large chunk of money out of it. They are ideal if you have a long investment horizon as they don’t work well for short-term.

Mid-cap funds are always the ideal investment option for young and matured investors. If as an investor, you’re willing to take greater risk and explore the volatility of the market, you may invest in this fund. Last but not the least, always invests your savings after duly checking your risk profile.

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