Mid-cap funds beat all diversified equity categories over 1, 3 and 5 years, here are the top-performing schemes

Mid-cap mutual funds have emerged as the best-performing equity fund category across the last one, three and five years, reinforcing their reputation as a sweet spot for investors seeking higher growth without venturing into narrowly focused themes.

An analysis of equity mutual fund categories (excluding sectoral and thematic funds) shows that mid-cap funds generated average returns of 4.04% over one year, 17.98% annualised over three years and 15.77% annualised over five years.

Mid-cap funds outperformed every diversified equity category

Among equity categories, small-cap funds came closest to mid-caps, delivering average returns of 2.92% over one year, 16.62% over three years and 15.30% over five years.

Multi-cap funds generated 1.08%, 14.71% and 13.36%, respectively, while value funds returned 0.96%, 13.69% and 12.77% over the same periods.

Flexi-cap funds, one of the most popular categories among retail investors, posted an average -0.54% return over one year, while large-cap funds delivered -1.84%. ELSS funds also remained in negative territory over the one-year period, although both categories continued to generate double-digit annualised returns over longer horizons.

HSBC Midcap Fund led one-year returns

Within the category, HSBC Midcap Fund emerged as the best-performing scheme over the past year with a return of 15.76%, comfortably ahead of both the category average and the benchmark.

It was followed by WhiteOak Capital Mid Cap Fund (11.64%), Helios Mid Cap Fund (11.59%), Baroda BNP Paribas Midcap Fund (9.84%) and ICICI Prudential Midcap Fund (9.59%).

Several well-established schemes, including Nippon India Growth Mid Cap Fund, Mirae Asset Midcap Fund, Kotak Midcap Fund and HDFC Mid Cap Fund, also posted positive returns, though they trailed the category leaders. At the other end of the spectrum, a handful of funds ended the year with negative returns, with Motilal Oswal Midcap Fund declining 5.63%.

Invesco India Mid Cap Fund leads 3-year and 5-year SIP returns

The rankings change when performance is measured through SIP returns, which better reflect the experience of investors making regular monthly investments across different market cycles.

Over the last three years, Invesco India Mid Cap Fund delivered the highest SIP return at 19.61%, followed by HSBC Midcap Fund (18.85%) and WhiteOak Capital Mid Cap Fund (17.64%).

For investors with a five-year SIP horizon, Invesco India Mid Cap Fund again topped the list with a return of 22.59%, ahead of HSBC Midcap Fund (21.65%). Other schemes such as Edelweiss Mid Cap Fund, ICICI Prudential Midcap Fund, Nippon India Growth Mid Cap Fund, Mahindra Manulife Mid Cap Fund and HDFC Mid Cap Fund also generated annualised SIP returns of around 19% over five years.

Best-performing mid-cap funds by SIP returns

For investors with a long investment horizon and a higher risk appetite, mid-cap funds continue to stand out as one of the strongest-performing diversified equity categories.