Investing in midcap mutual funds is an excellent way to achieve long-term financial growth. These funds focus on companies with significant growth potential, making them ideal for investors willing to take moderate risks. In this blog, we compare the top 5 midcap funds in India: Motilal Oswal Midcap Fund, Mahindra Manulife Midcap Fund, HDFC Midcap Opportunities Fund, Nippon India Growth Fund, and Edelweiss Mid Cap Fund. This analysis covers critical metrics such as AUM, CAGR (3, 5, and 10 years), Expense Ratio, Rolling Returns, Maximum Drawdown, and Sharpe Ratio.
1. Motilal Oswal Midcap Fund
- AUM: ₹26,421 Cr (as of Dec 31, 2024)
- CAGR (3 Years): 30.93%
- Expense Ratio: 0.65%
- Rolling Return (3 Years): 31.2%
- Maximum Drawdown: -22.5%
- Sharpe Ratio: 1.73
- CAGR (5 Years): 30.06%
- CAGR (10 Years): 19.64%
Key Highlights:
Motilal Oswal Midcap Fund leads in performance, delivering stellar returns over 3, 5, and 10 years. It has a balanced portfolio with notable investments in Coforge Ltd. (9.86%), Kalyan Jewellers (9.64%), and Polycab India (8.95%). While its returns are impressive, the fund’s volatility is slightly higher, making it more suitable for aggressive investors.
2. Mahindra Manulife Midcap Fund
- AUM: ₹3,529 Cr
- CAGR (3 Years): 24.29%
- Expense Ratio: 0.46%
- Rolling Return (3 Years): 25.1%
- Maximum Drawdown: -20.8%
- Sharpe Ratio: 1.2
- CAGR (5 Years): 27.51%
- CAGR (10 Years): N/A (7 years old)
Key Highlights:
Mahindra Manulife Midcap Fund is an emerging performer with a low expense ratio, making it cost-efficient. Its investments include Persistent Systems (3.61%) and Max Healthcare (3.2%), which contribute to its steady performance. However, its smaller AUM may impact liquidity during volatile market conditions.
3. HDFC Midcap Opportunities Fund
- AUM: ₹77,967 Cr
- CAGR (3 Years): 26.71%
- Expense Ratio: 0.76%
- Rolling Return (3 Years): 27.3%
- Maximum Drawdown: -18.9%
- Sharpe Ratio: 1.49
- CAGR (5 Years): 27.15%
- CAGR (10 Years): 17.94%
Key Highlights:
As one of the largest midcap funds, HDFC Midcap Opportunities Fund is ideal for investors seeking stability and consistent returns. Its top holdings include Indian Hotels (4.41%) and Coforge Ltd. (3.72%). While it’s not the most cost-effective fund, its performance justifies the slightly higher expense ratio.
4. Nippon India Growth Fund
- AUM: ₹35,278 Cr
- CAGR (3 Years): 25.87%
- Expense Ratio: 0.78%
- Rolling Return (3 Years): 26.0%
- Maximum Drawdown: -21.3%
- Sharpe Ratio: 1.45
- CAGR (5 Years): 28.93%
- CAGR (10 Years): 19.64%
Key Highlights:
Nippon India Growth Fund is known for its focus on long-term alpha generation. Its portfolio features high-growth companies like Dixon Technologies and Trent Ltd.. While its expense ratio is on the higher side, the fund’s strong returns make it a solid choice for long-term investors.
5. Edelweiss Mid Cap Fund
- AUM: ₹8,666 Cr
- CAGR (3 Years): 22.37%
- Expense Ratio: 1.73%
- Rolling Return (3 Years): 22.9%
- Maximum Drawdown: -23.0%
- Sharpe Ratio: 1.23
- CAGR (5 Years): 26.89%
- CAGR (10 Years): 14.13%
Key Highlights:
Edelweiss Mid Cap Fund balances risk and reward, delivering competitive returns over the years. However, its high expense ratio reduces net gains. The fund’s investments include Persistent Systems (4.51%) and Dixon Technologies (4.28%), indicating a strong focus on technology-driven growth.
| Fund Name | AUM (Cr) | CAGR (3Y) | CAGR (5Y) | CAGR (10Y) | Expense Ratio |
|---|---|---|---|---|---|
| Motilal Oswal Midcap Fund | ₹26,421 | 30.93% | 30.06% | 19.64% | 0.65% |
| Mahindra Manulife Midcap | ₹3,529 | 24.29% | 27.51% | N/A | 0.46% |
| HDFC Midcap Opportunities | ₹77,967 | 26.71% | 27.15% | 17.94% | 0.76% |
| Nippon India Growth Fund | ₹35,278 | 25.87% | 28.93% | 19.64% | 0.78% |
| Edelweiss Mid Cap Fund | ₹8,666 | 22.37% | 26.89% | 14.13% | 1.73% |
Comparison Table 2: Risk Metrics (Sharpe Ratio, Rolling Return, Max Drawdown)
| Fund Name | Sharpe Ratio | Rolling Return (3Y) | Max Drawdown |
|---|---|---|---|
| Motilal Oswal Midcap Fund | 1.73 | 31.2% | -22.5% |
| Mahindra Manulife Midcap | 1.2 | 25.1% | -20.8% |
| HDFC Midcap Opportunities | 1.49 | 27.3% | -18.9% |
| Nippon India Growth Fund | 1.45 | 26.0% | -21.3% |
| Edelweiss Mid Cap Fund | 1.23 | 22.9% | -23.0% |
Key Takeaways
- Best Performer: Motilal Oswal Midcap Fund excels with the highest returns and a balanced portfolio.
- Cost-Effective Choice: Mahindra Manulife Midcap Fund has the lowest expense ratio (0.46%), ideal for budget-conscious investors.
- Stable Option: HDFC Midcap Opportunities Fund offers high stability with the largest AUM.
- Tech-Focused Growth: Edelweiss Mid Cap Fund and Nippon India Growth Fund leverage technology-driven companies for growth.
Conclusion
Selecting the right midcap fund depends on your financial goals, risk tolerance, and investment horizon. Each of these funds has unique strengths, from Motilal Oswal’s high returns to Mahindra Manulife’s cost efficiency. Analyze the metrics, align them with your strategy, and invest wisely to secure a robust financial future.
Information Source – Rupeevest
Disclaimer: Mutual fund investments are subject to market risks. Past performance is not indicative of future returns. Consult a financial advisor before investing.