The Nifty Midcap 150 has outperformed large- and small-cap indices throughout a number of time frames, with a number of mid-cap funds delivering 23–27% three-year returns.
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Rising uncertainty however, traders are more and more shifting their bets from small-cap to mid-cap funds.
The gross inflows into mid-cap funds rose by ₹1,139 crore within the final 12 months ended January, to ₹94,043 crore, in contrast to ₹92,904 crore logged in small-caps.
After the latest meltdown in small-cap shares, traders have shifted their focus to mid-cap mutual fund schemes. With sturdy inflows and higher efficiency, the property beneath administration of mid-cap funds have elevated practically 2.5 occasions to ₹4.61 lakh crore in December 2025, up from ₹1.85 lakh crore in December 2022.
Efficiency edge
The Nifty Midcap 150 has outperformed each the Nifty 100 and the Nifty Smallcap 250 indices throughout one-, three-, five-, and seven-year time frames by truthful margins.
Apparently, most mid-cap mutual funds have crushed their benchmark indices. HDFC Mid-cap and Mahindra Manulife Mid Cap funds have delivered 27 per cent over three years, whereas mid-cap funds from Motilal Oswal MF and Kotak Mahindra MF delivered returns of 25 per cent and 23 per cent in the identical interval.
Skilled view
Krishna Patwari, Founder & MD, Wealth Knowledge India, mentioned mid-cap funds have attracted sturdy inflows over the previous few years due to their superior return potential.
Mid-caps have delivered over the long run. For example, an eight-year SIP in Mahindra Manulife Mid Cap Fund generated an prolonged inner price of return of twenty-two per cent, outperforming its benchmark, with constant rolling returns and comparatively higher risk-adjusted efficiency, he mentioned.
Knowledge from Franklin Templeton additionally exhibits regular SIP participation regardless of volatility, reinforcing investor dedication to long-term wealth creation. Investors should see this as a portfolio recalibration relatively than extreme risk-taking. Mid-caps stay enticing for development, however allocation self-discipline and a structured SIP strategy are key, he added.
Shantanu Awasthi, Co-founder and Chief Government Officer, Mavenark Wealth, mentioned the move into mid-cap funds has elevated as each mid-cap indices and mutual fund schemes have carried out properly during the last six months, and other people with a better danger urge for food are chasing increased returns.
However, risky small-cap shares have been crushed down, and cash has moved out of small-cap mutual fund schemes, he added.
Revealed on February 19, 2026
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