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  • Best Mid Cap Mutual Funds

Best Mid Cap Mutual Funds to Invest

Mid cap mutual funds invest in equities of mid-sized companies based on market capitalization and suited for long term investments. They have higher growth potential than large-cap companies and are less risky than small-cap companies.

Learn how Scripbox Recommends funds

Best Mid Cap Mutual Funds to Invest in 2024

Fund Name3Y ReturnsExpense Ratio
Motilal Oswal Midcap fund (G)
Motilal Oswal Midcap fund (G)
39.3%1.73
HDFC Mid Cap Opportunities Fund (G)
HDFC Mid Cap Opportunities Fund (G)
29.7%1.43
Mirae Asset Midcap Fund (G)
Mirae Asset Midcap Fund (G)
23.5%1.68
Quant Mid Cap Fund (G)
Quant Mid Cap Fund (G)
32.9%1.75
Nippon India Growth Fund (G)
Nippon India Growth Fund (G)
30.4%1.62
SBI Magnum Midcap Fund (G)
SBI Magnum Midcap Fund (G)
24.5%1.69

Note : *NA implies that Fund is relatively new. Not enough data available

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Who Should Invest in Mid Cap Funds?

Mid cap funds are a category of equity mutual funds that invest in midcap stocks. Mid cap stocks are of companies ranking between 101th and 250th by market capitalization. As these are pure equity funds, investors who are willing to take the risk associated with them can invest in midcap funds.

Mid cap companies can generate significant returns in the long term. These companies are also highly volatile. Additionally, mid cap companies have good growth potential.

One can invest in top performing mid cap funds to achieve their long term financial goals. Also, investors who are not affected by short term volatility can invest in mid cap mutual funds. They are good for portfolio diversification as the companies have good growth potential. Therefore, investors looking to accumulate wealth in the long term can invest in midcap funds. However, these funds have a significant amount of risk associated with them.

Features of Midcap Fund

  1. Growth Potential: Mid cap mutual funds invest in mid-sized companies that have a high potential to grow. They are often undervalued and hence are excellent picks to earn higher returns.
  2. Returns: Mid cap mutual funds give higher returns than large cap mutual funds in a bullish phase. They are highly responsive to opportunity and change.
  3. Taxation: Mid cap mutual funds are taxed like any other equity fund. In the short term (within one year), the gains are subject to STCG tax of 15%. In the long term (after one year), the gains exceeding INR 1 lakh are subject to LTCG tax of 10%. Dividends are taxable as per the investor’s income tax slab rate. Also, dividends above INR 5,000 are subject to TDS.
  4. Risk: They are very vulnerable to business cycles and hence have a higher risk than large cap mutual funds. However, they have their business model in place and are less risky than small cap funds.
  5. Diversification: Mid cap companies operate in emerging and niche markets. It allows investors to diversify their portfolio.
  6. Liquidity: Best mid cap mutual funds are highly liquid, and investors can sell their units whenever they want.
  7. Investment horizon: Mid cap mutual funds are highly volatile in the short term. These companies take time to grow and establish. Thus, Mid cap mutual funds tend to give higher returns in the long term (10 years plus).

How to Invest in Mid Cap Funds with Scripbox

Scripbox allows investors to invest in the top mid cap mutual funds. Their robotic technology and thorough research picks the best mid cap mutual funds for you. 

You can invest in Scripbox’s recommended best mid cap mutual funds in India by following the below-mentioned steps:

  1. Login to Scripbox
  2. Click on ‘Invest’
  3. Begin by selecting ‘A plan to invest in’ or ‘I want to choose my own funds.’
  4. Choose the investment mode: monthly SIP, one-time, or STP.
  5. Enter the investment amount.
  6. Receive recommended funds based on the invested sum.
  7. Customize fund selections and distribution.
  8. Select the payment mode.
  9. Complete the transaction to set up your investment.

Overview of the Top Equity Funds in India

PGIM India Midcap Opportunities Fund

The fund’s objective is to achieve long-term capital appreciation by predominantly investing in equity & equity related instruments of mid cap companies. 

The fund is suitable for investors with a minimum investment horizon of 5-7 years. The fund’s benchmark is Nifty Midcap 150 TR INR.

Motilal Oswal Midcap Fund

The fund’s objective is to achieve long term capital appreciation by investing in quality mid-cap companies with long term competitive advantages and potential for growth. 

Mid cap equities are highly volatile, and thus a long term investment horizon is necessary. The fund’s benchmark is Nifty Midcap 150 TR INR. 

Quant Mid Cap Fund

The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of Mid Cap companies.

The fund is suitable for investors with a minimum investment horizon of 5-7 years. The fund’s benchmark is Nifty Midcap 150 TR INR.

Kotak Emerging Equity Scheme

The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by investing predominantly in mid companies. The scheme may also invest in debt and money market instruments. 

The fund’s benchmark is Nifty Midcap 150 TR INR.

Nippon India Growth Fund

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

However, it doesn’t assure that the scheme’s investment objective will be realized, as actual market movements may differ from anticipated trends.

SBI Magnum Midcap Fund

To provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well-diversified basket of equity stocks of Midcap companies.

The fund’s benchmark is Nifty Midcap 150 TR INR.

Frequently Asked Questions

Which is better mid cap or small cap?

Mid cap companies have a high potential to grow and become large cap companies. They have a business model in place. They give higher returns than large cap companies in the bullish phase but are vulnerable to a falling market. However, they are less risky than small cap companies.
Small cap companies have a higher growth potential. They are just entering the market and hence very young and seek to expand aggressively. They are the riskiest companies as they are highly vulnerable to market cycles. However, in the bullish phase, they perform exceptionally well in the market.
One cannot say which is better from an investment perspective. All industries follow a business cycle, and no industry or company is always in the growth phase. However, investing in large caps is considered safest, followed by mid caps and then small caps. It depends on the investor’s needs and profiles to know which is the best fit for him/her. Thus, a risk-averse investor should reconsider investing in small and mid caps. 

Are mid caps a good investment?

An investment is considered good if it meets the investor’s needs and requirements. Mid cap mutual funds best suit investors that are willing to invest for the long term and are not affected by short term fluctuations. Mid cap funds are one of the equity mutual fund types. Investors seeking high returns but willing to absorb more risk should invest in the top midcap funds.
Mid cap mutual funds invest in equities of companies that rank between 101 and 250 based on market capitalization. Their high growth potential generates higher returns than large cap mutual funds in the bullish phase. During a bear market phase, even the top funds might lose substantial value as investors prefer safer options. They are less risky than small cap funds. Overall, the best mid cap mutual funds are suited for long term investments.

When should I buy mid-cap funds?

Mid cap funds are a double-edged weapon. They can grow in size and generate gains or they can go downside. This is why there is no good time to invest in mid cap funds. Markets are volatile and the best way to invest is regularly and for the long term. Mid cap funds are sensitive to market conditions, and they might have the potential to earn returns but at the same time can have downside risk. Investors who worry for small short term market movements should consider investing in diversified investments. However, investors who can stay invested in mid cap funds for the long term despite market fluctuations can earn substantial returns.