Mid-Cap Mutual Funds: A 2025 Investment Outlook
As of July 6, 2025, mid-cap mutual funds remain an attractive option for those looking to diversify their asset portfolio. These funds balance growth potential and risk, making them a strategic choice for many investors.
Backed predominantly by companies within the 101-250 cap ranking, mid-cap funds are positioned between stable large-cap funds and highly fluctuating small-cap funds. This positioning provides a compelling compromise between stability and potential for high returns.
With India's economy projected to be stable in 2025, mid-cap funds are well-poised to capitalize on increased spending in infrastructure, technology, and rising consumer demand. However, they carry short-term risks and their performance can be erratic. This makes them most suitable for investors with a long-term horizon and adequate risk tolerance.
Selection Criteria
The following criteria are crucial when selecting a mid-cap fund:
- Mean rolling returns: Indicates consistency of performance over various periods.
- 3-year & 5-year returns: Demonstrates medium to long-term growth.
- Downside risk: Measures a fund's performance during market downturns.
- AUM ≥ ₹50 cr: Ensures sufficient liquidity.
- Low expense ratio: Maximizes investor returns by minimizing costs.
Top 5 Mid-Cap Funds Dashboard
Select a fund below to see its detailed metrics. The charts provide a comparative overview of all funds.
Select a Fund to View Details
3-Year Returns Comparison (%)
Expense Ratio Comparison (%)
AUM Distribution (₹ Cr)
Detailed Comparison Table
| Metric | Kotak Emerging Equity | Axis Midcap | PGIM India Midcap | Tata Midcap Growth | Invesco India Midcap |
|---|
Market Trends and Recent News
The functioning of midcap funds has remained stable, with a few funds experiencing positive AUM growth in the past six months (Motilal Oswal Midcap Direct Growth has gained 7.5K crore in AUM in the last six months), and the increase in AUM could be considered a sign of investors becoming more interested moving forward (INDmoney, July 3, 2025).
On July 4, 2025, the Economic Times reported that the 5-year performance history of the mid-cap funds was better than that of large-cap funds but lower than the performance of small-cap funds, as expected with the normal market trend. This implies that midcap funds are in an ideal position to be diversified, namely in an expanding economy.
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