Annualised returns are a good indicator to evaluate the performance of mutual funds. The other factors that are vital for investors to judge their performance include safety of fund, liquidity among other factors such as credibility of fund house and that of fund managers.
Since mutual funds, by nature, are liquid, the other consideration that investors assess is the safety of funds which implies the fund should not be highly volatile.
Here, we are set to discuss the returns given by top-performing mid cap funds, particularly the ones which have delivered more than 30 percent in last three years. At the outset, however, we explain how are mid cap funds different from their small and larger peers.
What are mid cap funds?
These funds select stocks for investment from the mid cap category — i.e., stocks that are ranked between 100 to 250 by size (market capitalisation). They are considered good for investors who want to invest for a minimum of 3-4 years and are chasing high returns. Since these funds are more volatile than large caps, investors should be open to incur losses at the same time.
According to the latest monthly data from AMFI (Association of Mutual funds in India), there are 27 schemes in the mid cap category. After receiving the net inflow of ₹1,479 crore (against ₹1,244 crore in July), the net assets under management (AUM) as on Aug 31 stood at ₹1.78 lakh crore.
As shown in the table below, PGIM India Midcap Opportunities Fund delivered 41.82 percent return in the past three years. Quant Mid Cap Fund's returns were nearly 40.88 percent, SBI Magnum Midcap Fund gave 31.86 percent in the past three years and Edelweiss Mid Cap Fund delivered 30.17 percent return and Mirae Asset Midcap Fund gave 30.10 percent.
| Mid cap fund | 3-year-return (%) | Benchmark |
| Edelweiss Mid Cap Fund | 30.17 | 27.83 |
| Mirae Asset Midcap Fund | 30.10 | 27.83 |
| PGIM India Midcap Opportunities Fund | 41.82 | 27.83 |
| Quant Mid Cap Fund | 40.88 | 27.83 |
| SBI Magnum Midcap Fund | 31.86 | 27.83 |
(Source: Direct returns as on Sept 20, 2022)
(Benchmark index is NIFTY Midcap 150 Total Return Index)
However, it is important to note that these returns were only for three years. And if one looks at the past five-year returns of mid cap funds, none of the above-mentioned schemes delivered more than 30 percent returns.
Quant mid cap, meanwhile, gave 20.76 percent (direct) returns in the past five years, according to AMFI data as on Sept 20.
