In the past year, Indian equity markets have had a strong performance, as investors have enjoyed sharp rallies across broader indices. Mid-caps were a notable segment that has provided substantial returns to investors, thanks to higher corporate earnings, the increase in investor participation from the retail segment, and strong domestic liquidity.<\/p>\n\n\n\n
However, as of late 2024 and early 2025, it has exhibited corrections<\/a>, reminding investors of the volatility mid-caps come with despite the high-return opportunities.<\/p>\n\n\n\n After hitting all-time highs in the first half of FY 2024-25, the Nifty Midcap 150 index corrected as a result of global uncertainties, elevated U.S. bond yields, and concerns around valuations. Therefore, profit-booking by a large institutional investor, and a more cautious approach towards investing ahead of upcoming global central bank meetings added pressure to the mid-cap index.<\/p>\n\n\n\n [Read: <\/strong>Decoding the Recent Market Correction: What’s Behind the Fall in Mid and Small Caps<\/a>]<\/p>\n\n\n\n Historically, the mid-cap space has been a sweet area for investors seeking high-growth-type companies who have recently begun their business expansion initiatives. Several of India’s successful large-cap companies used to be mid-caps as well. Over time, mid-caps have continued to yield higher returns than large caps, with higher volatility. The recent correction provides potential investors the opportunity to accumulate, and this strongly appeals to investors who missed the previous rally.<\/p>\n\n\n\n Looking ahead, many mid-cap companies are positioned to benefit from structural themes including Make in India, digitization, renewable energy, and financial inclusion. However, stock selection and timing still matter, as not every mid-cap company has the same capacity to cope with a downturn or scale sustainably.<\/p>\n\n\n\n For investors, this is an opportunity to reassess their mid-cap exposure<\/a> and consider if the schemes they own are in alignment with their risk tolerance and investment objectives. Not all mid-cap funds have the same style– some are more aggressive and concentrated versus, more balanced and diversified.<\/p>\n\n\n\n [Read: <\/strong>Should You Invest in Mid-Cap and Small-Cap Funds Amidst Volatile Equity Markets?<\/a>]<\/p>\n\n\n\n Keeping this in view, here’s a thorough analysis of two prominent mid-cap schemes that have delivered superior returns during various market cycles.<\/p>\n\n\n\n # – HDFC Mid-Cap Opp Fund<\/a><\/strong><\/p>\n\n\n\n Started in June 2007, the scheme currently has a strong AUM of Rs 67,579 crores. It is the largest scheme in the mid-cap segment following a bottom-up stock-picking approach with a focus on investing in quality mid-sized companies that have consistent earnings growth, strong management, and sustainable business models.<\/p>\n\n\n\n # – Motilal Oswal Midcap Fund<\/a><\/strong><\/p>\n\n\n\n Launched in February 2014, Motilal Oswal Midcap Fund invests in a concentrated portfolio of mid-cap stocks that exhibit strong growth potential, high return on equity, and scalability. The scheme currently holds an AUM of Rs 23,704 crores. It tends to take long-term bets on a select few businesses with the belief that staying invested in quality companies over time delivers superior returns. This strategy can lead to sharp outperformance during bull markets but also exposes the fund to higher short-term volatility.<\/p>\n\n\n\n Performance Comparison: Rolling Returns<\/strong><\/p>\n\n\n\n Data as of April 03, 2025 HDFC Mid-Cap Opportunities Fund and the Motilal Oswal Midcap Fund have both produced solid returns above the category average and the Nifty Midcap 150 TRI benchmark across several time frames. In the last year, for instance, while the HDFC Mid-Cap Opportunities Fund returned 42.40%, Motilal Oswal Midcap Fund delivered an impressive annual return of 56.40%, outperforming the category average of 40.50% and the HDFC Mid-Cap Opportunities Fund.<\/p>\n\n\n\n Furthermore, the long-term performance of these mid-cap funds, over the 3 and 5-year periods, is similar – working out at 28.32% and 28.92% CAGR for the HDFC Mid-Cap Opportunities Fund, versus a CAGR of 35.80% and 35.53% for the Motilal Oswal Mid Cap Fund – the gap is narrower over a longer time range.<\/p>\n\n\n\n [Read: <\/strong>5 Mid Cap Funds Down by Over 15% in the Recent Market Correction<\/a>]<\/p>\n\n\n\n Over a systematic analysis timeframe of 7 years, the two funds have again delivered similar performance, but over a 10-year time horizon, the difference is more pronounced. In reviewing performance outcomes, it is the Motilal Oswal Midcap Fund that has consistently displayed superior performance over the time horizon considered making it the fund of choice for wealth-seeking investors who are willing to take on more risk in the mid-cap equity universe.<\/p>\n\n\n\n That said, while higher returns are desirable, risk factors must also be considered, as generally the higher the return, the higher the risk and volatility outcomes.<\/p>\n\n\n\n\n\t\n\t\t
\n\t\t\t Scheme Name<\/td>\n\t\t\t <\/td>\n\t\t\t CAGR (%)<\/td>\n\t\t<\/tr>\n\t\t \n\t\t\t 1 Year<\/td>\n\t\t\t 3 Years<\/td>\n\t\t\t 5 Years<\/td>\n\t\t\t 7 Years<\/td>\n\t\t\t 10 Years<\/td>\n\t\t<\/tr>\n\t\t \n\t\t\t HDFC Mid-Cap Opp Fund<\/a><\/b><\/td>\n\t\t\t 39.39<\/td>\n\t\t\t 28.32<\/td>\n\t\t\t 28.92<\/td>\n\t\t\t 19.35<\/td>\n\t\t\t 20.02<\/td>\n\t\t<\/tr>\n\t\t \n\t\t\t Motilal Oswal Midcap Fund<\/a><\/b><\/td>\n\t\t\t 55.65<\/td>\n\t\t\t 35.80<\/td>\n\t\t\t 35.53<\/td>\n\t\t\t 22.40<\/td>\n\t\t\t 21.89<\/td>\n\t\t<\/tr>\n\t\t \n\t\t\t Category Average – Mid-Cap Funds<\/b><\/td>\n\t\t\t 40.50<\/td>\n\t\t\t 23.69<\/td>\n\t\t\t 25.71<\/td>\n\t\t\t 18.25<\/td>\n\t\t\t 18.85<\/td>\n\t\t<\/tr>\n\t\t \n\t\t\t Benchmark – Nifty Midcap 150 TRI<\/b><\/td>\n\t\t\t 38.46<\/td>\n\t\t\t 24.70<\/td>\n\t\t\t 28.29<\/td>\n\t\t\t 18.80<\/td>\n\t\t\t 19.51<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n<\/div>\n<\/center>\n\n\n\n
Do note past performance is not an indicator of future returns
The securities quoted are for illustration only and are not recommendatory.
(Source: ACE MF, data collated by PersonalFN Research) <\/p>\n\n\n\n