Synopsis: Over the last five years, several midcap funds have delivered returns above their category average through different market cycles. This article highlights leading funds that have beaten their category benchmarks over the past five years.
Midcap mutual funds are often opted by many investors who prefer the length of risk to be calculated. It is placed between the relative stability of large-cap funds and the aggressive growth potential of small-cap funds. Midcap schemes aim to capture companies that are expanding rapidly but are not yet industry giants. In the last five years, this segment has experienced both sharp corrections and strong rallies.
What Are Midcap Mutual Funds?
Midcap mutual funds are equity schemes that must invest at least 65% of their total assets in mid-cap companies. As defined by the Securities and Exchange Board of India (SEBI)- mid-cap companies are those ranked from 101st to 250th in terms of full market capitalization on recognized stock exchanges.
What Does It Mean to Outperform Its Category?
The fund outperforming its category means the fund has delivered higher returns than the average return of all funds within the midcap mutual fund category over a specific period of time.
For example, if the average five-year annualized return of the midcap category is 18% and a midcap fund has delivered 22% annualized returns over the same period then that fund is said to have outperformed its category by 4 percentage points annually.
How We Have Selected These Funds
Methodology: These Funds were shortlisted based on a minimum 5-year CAGR of over 20% and Direct Growth plans for an accurate return comparison. Performance was evaluated against the midcap category average and benchmark indices. Returns and AUM data were sourced from Groww based on publicly available disclosures. Returns mentioned are annualized (CAGR) and subject to market risks.
Midcap Mutual Funds That Outperformed Its Category in the Last 5 Years
7. Quant Mid Cap Fund Direct Growth
- NAV (As of 16 Feb 2026): ₹222.50
- AUM: ₹7,283 crore
- Expense Ratio: 0.82%
- Exit Load: 0.50% if redeemed within 3 months
Performance Snapshot
- 3-Year CAGR: 15.5%
- 5-Year CAGR: 21.8%
- 3-Year Absolute Return: 57.2%
- 5-Year Absolute Return: 167.4%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 21.8%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance: +1.89 percentage points
The high number of 21.8% of five-year annualised returns is a strong indicator that this fund outperformed the midcap category average. Though the fund’s negative alpha (-6.58) suggests recent underperformance against its benchmark on a risk-adjusted basis. Its Sharpe ratio of 0.51 shows moderate risk-adjusted returns. The top holdings are Aurobindo Pharma Ltd, Tata Communications Ltd, and IRB Infrastructure Developers Ltd. The fund is managed by Sanjeev Sharma, Sandeep Tandon, Ankit A. Pande, Varun Pattni, Sameer Kate, Ayusha Kumbhat, and Yug Tigrewal.
6. Invesco India Mid Cap Fund Direct Growth
- NAV (As of 16th Feb 2026): ₹219.91
- AUM: ₹10,058 cr
- Expense Ratio: 0.54%
- Exit Load: 1% if redeemed within 1 year
Performance Snapshot
- 3-Year CAGR: 28.7%
- 5-Year CAGR: 22.7%
- 3-Year Absolute Return: 114.0%
- 5-Year Absolute Return: 177.87%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 22.7%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance: +2.79 percentage points
The fund has an alpha of 3.95 which indicates effective benchmark beating performance. Its Sharpe ratio of 1.15 reflects strong risk-adjusted returns and suggests the fund has delivered returns efficiently relative to volatility. The portfolio is almost fully invested in equities (99.60%) which also shows a high conviction positioning. The fund is managed by Aditya Khemani and the top holdings are Federal Bank, AU Small Finance Bank, and Prestige Estates Projects .
5. Mahindra Manulife Mid Cap Fund Direct Growth
- NAV (As of 16th Feb 2026): ₹38.75
- AUM: ₹4267 cr
- Expense Ratio: 0.52
- Exit Load: 1% If redeemed within 3 months
Performance Snapshot
- 3-Year CAGR: 26.35%
- 5-Year CAGR: 22.94%
- 3-Year Absolute Return: 102.3%
- 5-Year Absolute Return: 185.0%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 22.94%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance:+3.03 percentage points
This fund has made a healthy alpha of 3.29 which signifies consistent value addition over its benchmark. Its Sharpe ratio of 1.18 indicates strong adjustment in risks within the midcap space. Its 98% allocation to equities shows that the fund remains focused on growth. The fund is managed by Krishna Sanghavi, Neelesh Dhamnaskar, and Kirti Dalvi. The top three holdings are Glenmark Pharmaceuticals, Federal Bank, and Piramal Finance.
4. Edelweiss Mid Cap Direct Plan Growth
- NAV (As of 16th Feb 2026): ₹121.44
- AUM: ₹13,802
- Expense Ratio: 0.42%
- Exit Load: 1% If redeemed within 3 months
Performance Snapshot
- 3-Year CAGR: 27.09%
- 5-Year CAGR: 23.10%
- 3-Year Absolute Return: 107.9%
- 5-Year Absolute Return: 186.8%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 23.10%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance:+3.19 percentage points
The fund has delivered a 23.10% five-year CAGR beating the category average. A strong alpha of 5.15 indicates a strong outperformance relative to its benchmark and the Sharpe ratio of 1.27 places it among the better risk-adjusted performers in this list. The fund’s portfolio is a mix of 96% in equities and 5.27% Debt, and -2.03% in cash. The fund is managed by Dhruv Bhatia, Trideep Bhattacharya, and Raj Koradia. Its top holdings are Persistent Systems, Multi Commodity Exchange of India, and Coforge Ltd.
Also read: Top Performing Mutual Funds: 7 Large-Cap Funds With Up to 27% CAGR Over the Last 5 Years
3. Nippon India Growth Mid Cap Fund Direct Growth
- NAV (As of 16th Feb 2026): ₹4,756.84
- AUM: ₹41,727 cr
- Expense Ratio: 0.72%
- Exit Load: 1% If redeemed within 1 month
Performance Snapshot
- 3-Year CAGR: 27.06%,
- 5-Year CAGR: 23.55%
- 3-Year Absolute Return: 106.5%
- 5-Year Absolute Return: 191.4%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 23.55%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance:+3.64 percentage points
The fund has outperformed its category and maintained a positive alpha of 3.48. Its Sharpe ratio of 1.18 shows stable measures towards risks and returns in a volatile segment. The portfolio is 98.98% in equity and 1.02 in Cash. The fund is managed by Rupesh Patel, Kinjal Desai, Divya Dutt Sharma, and Lokesh Maru. The top three holdings are BSE Ltd, Federal Bank, and Fortis Healthcare.
2. HDFC Mid Cap Fund Direct Growth
- NAV (As of 16th Feb 2026): ₹224.57
- AUM: ₹92,187 cr
- Expense Ratio: 0.76%
- Exit Load: 1% If redeemed within 1 Year
Performance Snapshot
- 3-Year CAGR: 26.41%
- 5-Year CAGR: 23.68%
- 3-Year Absolute Return: 103.8%
- 5-Year Absolute Return: 193.5%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 23.68%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance:+3.77 percentage points
The fund stands out with a strong alpha of 5.00 and Sharpe ratio of 1.31 which is among the highest in this list. The percentage shows better risk management when compared to the other in the list. The fund has Equity 94.05% and Cash 5.95%. The fund is managed by Chirag Setalvad and Dhruv Muchhal and the top holdings are Max Financial Services, AU Small Finance Bank, and Federal Bank.
1. Motilal Oswal Midcap Fund Direct Growth
- NAV (As of 16th Feb 2026): ₹107.26
- AUM: ₹34,432 cr
- Expense Ratio: 0.77%
- Exit Load: 1% If redeemed within 1 year
Performance Snapshot
- 3-Year CAGR: 23.94%
- 5-Year CAGR: 24.80%
- 3-Year Absolute Return: 87.4%
- 5-Year Absolute Return: 203.3%
Category Comparison (5-Year)
- Fund 5-Year CAGR: 24.80%
- Mid Cap Category Average (5-Year): 19.91%
- Outperformance: +4.89 percentage points
The final Mid-Cap fund and the topper of the list comes with a five-year CAGR of 24.80%. Although its alpha of 2.02 is comparatively moderate, it still indicates positive excess performance over the benchmark. The Sharpe ratio of 0.92 suggests decent but relatively higher volatility compared to peers. The fund has Equity 93.46% and Cash 6.31% and Hedged Equity 0.23%
It is managed by Swapnil P. Mayekar and Varun Sharma, Ajay Khandelwal, Ankit Agarwal, and Rakesh Shetty. The top 3 holdings are Persistent Systems, Coforge Ltd, and One97 Communications.
Mid-Cap Fund Performance Comparison Table:
Some Risk Factors to Consider
Midcap funds are inherently more volatile than large-cap funds because mid-sized companies are more sensitive to liquidity conditions. During market corrections midcaps can fall more sharply than broader indices. Risk and adjustment indicators such as alpha and Sharpe ratio become important in such cases. (Note: a higher Sharpe ratio indicates better return per unit of risk and positive alpha reflects value addition over the benchmark)
Another factor to consider is portfolio concentration. Funds with higher exposure to top holdings may receive superior returns if stock selection works well, but they also carry higher downside risk. Liquidity risk and valuation risk should also be monitored.
Conclusion
To sum it up, several midcap mutual funds have successfully outperformed their category average. These funds have delivered particularly strong risk-adjusted performance while also being supported by alpha and Sharpe ratios.
However, outperformance should not be viewed in isolation for future gains. Investors must keep an eye on risk metrics, portfolio allocation, fund management consistency, and expense ratios before making a decision. Midcap investing can be rewarding but risk tolerance is important too.
Disclaimer: The information provided in this article is for educational purposes only and should not be construed as financial advice or investment recommendation. Returns mentioned are based on historical performance and may not be sustained in the future. Mutual fund investments are subject to market risks, including potential loss of capital. Investors are advised to assess their risk appetite, financial goals, and consult a certified financial advisor before investing.
