As we navigate through 2024, mid-cap mutual funds continue to offer an attractive blend of growth potential and risk management, positioning themselves as an essential component of a diversified investment portfolio. These funds invest in mid-sized companies that are in the sweet spot of their growth trajectory—larger and more stable than small-caps, yet more dynamic and with higher growth potential than large-caps. This guide will explore the top 10 mid-cap mutual funds based on their 3-year Compound Annual Growth Rate (CAGR), providing an insightful overview for investors aiming to capitalize on the growth opportunities presented by the mid-cap segment.

What Are Mid-Cap Mutual Funds?

Mid-cap mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of mid-sized companies. Typically, these companies have market capitalizations that fall in the middle range of the stock market. The exact definition of “mid-cap” can vary, but it generally encompasses companies with market capitalizations between $2 billion and $10 billion. These funds are managed by professional fund managers who aim to generate high returns by capitalizing on the growth potential of these mid-sized companies.

1. Quant Mid Cap Fund

• Expense Ratio: 0.76%
• 3-Year CAGR: 41.14%
• AUM: ₹4,222 Crores

Known for its aggressive growth strategies, the Quant Mid Cap Fund has outperformed its peers with a remarkable 3-year CAGR. It focuses on companies with high growth potential in the mid-cap space, employing quantitative analysis to identify undervalued stocks.

2. Motilal Oswal Midcap Fund

• Expense Ratio: 0.65%
• 3-Year CAGR: 38%
• AUM: ₹6,805 Crores

This fund aims for long-term capital appreciation by investing in a diversified portfolio of mid-cap stocks. It follows a research-driven investment approach, focusing on companies with strong fundamentals and sustainable business models.

3. Mahindra Manulife Mid Cap Fund

• Expense Ratio: 0.51%
• 3-Year CAGR: 34.85%
• AUM: ₹1,903 Crores

With a lower expense ratio, this fund seeks to maximize returns by investing in mid-sized companies that show potential for high growth. It emphasizes companies with innovative business practices and scalability.

4. HDFC Mid-Cap Opportunities Fund

• Expense Ratio: 0.8%
• 3-Year CAGR: 34.51%
• AUM: ₹52,138 Crores

As one of the largest mid-cap funds, it focuses on companies with robust business models and growth potential. The fund managers are known for their selective approach, prioritizing value over short-term gains.

5. Nippon India Growth Fund

• Expense Ratio: 0.83%
• 3-Year CAGR: 33.47%
• AUM: ₹23,495 Crores

This fund targets companies in the growth phase with scalable business models. It benefits from Nippon’s extensive research capabilities, aiming to identify future market leaders in the mid-cap segment.

6. Edelweiss Mid Cap Fund

• Expense Ratio: 0.43%
• 3-Year CAGR: 31.74%
• AUM: ₹4,624 Crores

It stands out for its low expense ratio and consistent performance. The fund invests in mid-cap companies with strong growth prospects, operational efficiencies, and competitive advantages.

7. SBI Magnum Midcap Fund

• Expense Ratio: 0.84%
• 3-Year CAGR: 29.55%
• AUM: ₹15,458 Crores

Focused on generating long-term capital growth, this fund invests in a mix of mid-cap stocks across various sectors. It leverages SBI’s vast research network to spot investment opportunities early.

8. Mirae Asset Midcap Fund

• Expense Ratio: 0.56%
• 3-Year CAGR: 29.4%
• AUM: ₹13,815 Crores

This fund aims for capital appreciation by investing in companies that have the potential for rapid growth. It has a diversified portfolio that reduces risk while aiming to capitalize on the growth trajectory of mid-cap companies.

9. Tata Mid Cap Growth Fund

• Expense Ratio: 0.81%
• 3-Year CAGR: 29.27%
• AUM: ₹3,041 Crores

Targeting companies with high growth potential, this fund focuses on sectors expected to benefit from the economic growth. It combines growth and value investing, aiming to offer investors the best of both worlds.

10. ICICI Prudential Midcap Fund

• Expense Ratio: 1.06%
• 3-Year CAGR: 29.05%
• AUM: ₹5,115 Crores

With a higher expense ratio, this fund seeks to balance risk and reward by investing in a diversified portfolio of mid-cap companies. It focuses on sectors with high growth potential and companies within those sectors that are likely to outperform.

Why Invest in Mid-Cap Funds?

Mid-cap funds offer a unique combination of growth and stability. These companies have the potential to offer higher growth rates than large-cap companies due to their ability to innovate and adapt quickly. Additionally, mid-caps tend to be less volatile than small-cap companies, making them an attractive option for investors seeking growth with a moderate level of risk.

How to Choose the Right Mid-Cap Fund?

When selecting a mid-cap mutual fund, consider factors such as the fund’s historical performance, expense ratio, fund manager’s expertise, and the fund’s investment strategy. It’s also crucial to assess your own risk tolerance and investment goals.

Conclusion

The mid-cap mutual fund segment offers a plethora of opportunities for investors looking to diversify their portfolios with a blend of growth and stability. The top 10 mid-cap mutual funds of 2024 listed above have demonstrated exceptional performance based on their 3-year CAGR, making them worthy of consideration for any investor interested in the mid-cap space.

The content provided on this blog is for informational purposes only and does not constitute financial advice, investment advice, or any other kind of advice. The blog owner and contributors are not responsible for any actions taken by readers based on the information provided. Participation in the stock market comes with inherent risks, including the possibility of losing the invested capital. Readers are advised to conduct their own research or consult a professional financial advisor before making any investment decisions.