About Mid Cap Mutual Funds
Mid-cap mutual funds are equity schemes that invest mainly in mid-cap equities, which are classified by SEBI as companies ranked 101 to 250 in terms of the entire market capitalisation. These funds seek to capitalise on growth prospects presented by developing businesses that are adequately established but still expanding. Mid-cap funds are ideal for individuals with a long investment horizon and a moderate-to-high risk tolerance.
How Do Mid-Cap Funds Work?
Mid-cap funds operate a diverse portfolio of mid-sized firms with the goal of generating capital appreciation. The fund structure enables investors to obtain exposure to several equities with a single investment. Here's how the fund works:
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The fund pools money from multiple investors into a single portfolio.
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A professional fund manager selects stocks based on growth potential, financial strength, and sector outlook.
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A minimum of 65% of the corpus is invested in equity and equity-related instruments.
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The Net Asset Value (NAV) changes daily depending on the market value of the underlying holdings.
Investors can invest through lump sum contributions or Systematic Investment Plans (SIPs). Since mid-cap companies are in an expansion phase, these funds aim to benefit from their long-term growth, though they may experience higher volatility than large-cap funds.
Top 10 Mid Cap Mutual Funds to Invest in 2026
| Name | AUM | ↓CAGR 3Y | Absolute Returns - 1Y |
| Invesco India Midcap Fund | 10,296.36 | 28.16 | 14.28 |
| Edelweiss Mid Cap Fund | 13,650.47 | 27.99 | 12.94 |
| ITI Mid Cap Fund | 1,329.00 | 27.69 | 13.41 |
| WOC Mid Cap Fund | 4,447.55 | 27.6 | 13.84 |
| Nippon India Growth Mid Cap Fund | 42,124.50 | 27.3 | 13.68 |
| HDFC Mid Cap Fund | 92,641.55 | 27.02 | 14.88 |
| JM Midcap Fund | 1,178.20 | 26.77 | 5.3 |
| Mahindra Manulife Mid Cap Fund | 4,294.84 | 26.76 | 10.72 |
| Sundaram Mid Cap Fund | 13,292.89 | 26.45 | 12.39 |
| HSBC Midcap Fund | 12,439.62 | 26.2 | 14.68 |
Note: The data above is as of Feb 5, 2026 and is sorted and ranked as per 3-year CAGR.
Invesco India Midcap Fund
Invesco India Midcap Fund seeks to generate capital appreciation by investing predominantly in mid-cap companies. The fund has an expense ratio of 0.54%, positioning it in the mid range among mid-cap funds. It is managed by Aditya Khemani.
Edelweiss Mid Cap Fund
Edelweiss Mid Cap Fund aims to generate long-term capital appreciation through a portfolio largely invested in equity and equity related securities of mid-cap companies. The fund has an expense ratio of 0.40%. It is managed by Trideep Bhattacharya along with two other fund managers.
ITI Mid Cap Fund
ITI Mid Cap Fund seeks to generate long-term capital appreciation by predominantly investing in equity and equity related securities of mid-cap stocks. The fund operates with an expense ratio of 0.36%. It is managed by Rohan Korde along with one other fund manager.
WOC Mid Cap Fund
WOC Mid Cap Fund aims to generate capital appreciation by actively investing in and managing a diversified portfolio primarily composed of mid-cap stocks. The fund has an expense ratio of 0.53%. It is managed by Ramesh Mantri along with three other fund managers.
Nippon India Growth Mid Cap Fund
Nippon India Growth Mid Cap Fund aims for long-term capital growth through a research-based investment approach. The fund primarily invests in equity and equity-related instruments, with additional exposure to debt and money market instruments. It has an expense ratio of 0.74% and is managed by Rupesh Patel.
HDFC Mid Cap Fund
HDFC Mid Cap Fund seeks to provide long-term capital appreciation and income by investing predominantly in mid-cap companies. The fund carries an expense ratio of 0.71%. It is managed by Chirag Setalvad.
JM Midcap Fund
JM Midcap Fund aims to provide long-term capital appreciation and income by investing predominantly in mid-cap companies. The scheme notes that there is no assurance that the investment objective will be achieved. The fund has an expense ratio of 0.60% and is managed by Satish Ramanathan along with three other fund managers.
Mahindra Manulife Mid Cap Fund
Mahindra Manulife Mid Cap Fund seeks to generate long-term capital appreciation and provide growth opportunities by investing in equity, equity-related securities, and derivatives, predominantly in mid-cap companies. The fund has an expense ratio of 0.45% and is managed by Kirti Dalvi along with two other fund managers.
Sundaram Mid Cap Fund
Sundaram Mid Cap Fund aims to achieve capital appreciation by investing in mid-cap stocks. The fund defines mid-cap stocks as those with market capitalisation not exceeding that of the 50th stock listed on the NSE after sorting by market capitalisation. The fund has an expense ratio of 0.86% and is managed by S. Bharath along with one other fund manager.
HSBC Midcap Fund
HSBC Midcap Fund seeks to generate long-term capital growth through an actively managed portfolio of equity and equity-related securities, predominantly in mid-cap companies. The fund has an expense ratio of 0.65% and is managed by Cheenu Gupta.
Who Should Invest in Mid-Cap Mutual Funds?
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High to moderate risk appetite: Investors with a high to moderate risk appetite can consider investing in these funds, as they are susceptible to market volatility and economic downturns. The funds are also riskier than large-cap variants.
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Long-term investment: Since these funds are relatively risky, they may take longer to recover than large-cap funds in case of adverse market conditions. As for returns, mid-cap funds have the potential to give higher returns than large-cap variants. Considering these factors, mid-cap funds are well-suited for investors with a long-term horizon.
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Has market knowledge: These funds are more suitable for investors who have been in the market for some time, as they are in a better position to analyse the right fund based on risk, returns, and other parameters.
How To Invest in Mid Cap Funds on Angel One?
Investing in the mid-cap Mutual Funds is hassle-free when done through your Angel One account. You just have to follow these simple steps:
Step 1: Log in to your Angel One account.
Step 2: Choose a mid-cap fund that suits your needs and risk profile. You can learn more about each mid-cap fund on the Angel One app. Things to consider at this stage are:
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Search for the fund you want to invest in.
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Analyse the fund’s past performance, tax incidence, and the sectors and companies it invests in.
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You can also calculate the potential returns using the calculator.
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Evaluate the fund’s level of risk, its ratings and expense ratio.
Step 3: Once you finalise the mid-cap fund(s) you want to invest in, open your Angel One account, go to the Mutual Funds section, and look for it.
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Decide whether you want to invest via SIP or make a one-time investment.
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Decide your monthly SIP date. Now, enter the amount you want to invest and choose the payment mode.
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After placing the order, you can create an AutoPay to make hassle-free future installments in case of SIP investments.
Note: You can also set up an AutoPay mandate for SIP investments to ensure timely instalments. An Angel One account is required to invest through the platform.
Features of Mid-Cap Mutual Funds
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Equity-oriented allocation: Mid-cap funds invest primarily in mid-sized company shares and equity-related assets, making them similar to equity mutual funds.
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Active portfolio management: These funds are actively managed, with fund managers choosing stocks based on financial criteria, earnings potential, and sector prospects.
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Higher volatility than large caps: Mid-cap equities may undergo quicker price changes over market cycles, resulting in comparatively higher NAV fluctuations.
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Expense ratio applicable: Mid-cap funds, like other mutual funds, have an expense ratio that deducts fund management and operating costs from the fund's assets.
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Suitable for long-term holding: Due to significant short-term volatility, these funds are typically designed for investors with a longer investment horizon.
Advantages of Mid-Cap Funds
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Attractive returns: Mid-cap investments give relatively higher returns compared to large-cap variants because such companies have higher growth potential. Often, they may also have a good business record while also showing signs of becoming a potential industry giant.
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Comparatively less sensitive to market volatility: Similar to other mutual funds, a mid-cap mutual fund is also sensitive to market volatility. However, the rate of its underperformance at such times might be limited compared to small-cap funds. This is because mid-cap funds are comparatively more mature than small funds.
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A mix of small and large-cap funds’ opportunities: Some of the best mid-cap mutual funds can prove to be a common ground between large-cap funds and small-cap funds. This is because they can grow faster than large-cap funds and are less volatile than small-cap funds.
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Diversification: While giving investors a middle ground in terms of risk and returns, it restrains them from going too far in extreme directions.
Factors To Consider Before Investing in Mid-Cap Funds
Before you invest in mid-cap funds, consider the following factors:
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Investment horizon: Because of their potential for short-term volatility, these funds are best suited for long-term objectives.
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Risk tolerance: Mid-cap funds are more volatile than large-cap funds during market downturns. Determine whether you can withstand temporary losses.
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Fund performance: Analyse historical returns over 3- and 5-year periods and compare them to benchmark and comparable funds.
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Expense ratio: Higher expenditures may diminish total returns over time. Compare spending ratios within each category.
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Portfolio composition: Look at sector allocation, top holdings, and diversity level.
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Track record of fund managers: Evaluate their consistency for handling similar strategies across several market cycles.
Taxability of Mid-Cap Funds
Mid-cap mutual funds are taxed as equity mutual funds since they invest mostly in equities. The tax liability fluctuates with the holding term and the type of income earned:
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Short-term capital gains (STCG)
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Applicable if units are sold within 12 months of purchase.
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Taxed at 20% as per the revised equity taxation rules.
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Long-term capital gains (LTCG)
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Applicable if units are held for more than 12 months.
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Gains up to ₹1.25 lakh in a financial year are exempt.
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Gains exceeding ₹1.25 lakh are taxed at 12.5% without indexation benefit.
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Dividend income
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Dividends are added to the investor’s total income and taxed as per the applicable slab rate.
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10% TDS is deducted by the fund house if dividend income exceeds ₹5,000 in a financial year under Section 194K.
