Top Mid Cap Funds for SIP in 2025^~

What is a Mid Cap Fund?

Mid-cap funds are a type of equity funds that invest at least 65% of their money in companies ranked 101-250 by market capitalization. These funds target mid-sized companies with good growth potential. These companies have a market capitalization generally ranging from ₹5,000 crore to ₹20,000 crore. Mid-cap funds offer a balance of growth and stability.

• Objective: Mid-cap funds aim to provide higher returns than large-cap funds while presenting less risk than small-cap funds. 

• Benefit: They offer a mix of growth potential and stability, ideal for medium-term investors.

• Suitable For: Suitable for investors with a moderate risk appetite and long-term goals. They are ideal for investors who are looking for growth opportunities without the extreme volatility associated with smaller companies.

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Expected return Pro Tip

Top 25% of investors consistently generate more than 12% return

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Total Wealth ₹22.4 L

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Expected return Pro Tip

Top 25% of investors consistently generate more than 12% return

% Annually

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Monthly Investment ₹22.4 L

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Top Funds with High Returns (Past 7 Years)

16.4%

High Growth Fund

16.77%

Top 200 Fund

13.2%

Accelerator Mid-Cap Fund II

13.33%

Opportunities Fund

8.64%

Equity II Fund

11.62%

Accelerator Fund

12.67%

Grow Money Plus Fund

14.04%

Multiplier

10.82%

Equity Top 250 Fund

11.19%

Future Apex Fund

10.97%

Opportunities Fund

12.76%

Frontline Equity Fund

14.2%

Virtue II

9.39%

Pension Dynamic Equity Fund

10.45%

Equity Fund

9.07%

Blue-Chip Equity Fund

Top Mid Cap Funds for SIP in 2025^~

Some of the top-performing mid-cap funds for SIP in 2025 based on returns, portfolio quality, and fund manager performance are as follows:

1. ULIP Funds

   Fund Name	NAV	1-Year Returns	3-Year Returns	5-Year Returns
   PNB MetLife Mid Cap Fund	₹43.78	43.30%	29.10%	32.80%
   Tata AIA Life Midcap Momentum Index Fund	₹19.15	36.75%	–	–
   HDFC Life Individual Midcap Fund	₹32.05	36.50%	–	–
   Max Life Midcap Momentum Index Fund	₹12.28	34.90%	–	–
   Tata AIA Whole Life Mid Cap Equity Fund	₹156.18	33.90%	23.90%	26.90%
   ICICI Life Mid Cap Fund	₹18.84	33.80%	–	–
   ABSLI Nifty Midcap 150 Index Fund	₹24.24	32.52%	23.94%	–
   Bajaj Allianz Life Equity Midcap Fund	₹155.36	31.50%	21.40%	20.70%
   Bajaj Allianz Life Accelerator Mid-Cap Fund II	₹85.96	30.60%	21.00%	21.90%
   ICICI Life Mid Cap Index Fund	₹13.80	28.60%	–	–

   *NAV as of 05 December 2024

2. Mutual Funds

   Fund Name	NAV	1-Year Returns	3-Year Returns	5-Year Returns
   Motilal Oswal Midcap Fund	₹125.95	62.75%	37.43%	34.58%
   Invesco India Mid Cap Fund	₹205.29	49.19%	27.37%	30.07%
   Edelweiss Mid Cap Fund	₹117.56	47.53%	28.97%	32.59%
   HSBC Midcap Fund	₹453.58	44.11%	27.39%	26.69%
   Kotak Emerging Equity Fund	₹156.29	40.79%	25.58%	29.31%
   Mahindra Manulife Mid Cap Fund	₹38.44	40.47%	28.63%	30.80%
   Sundaram Mid Cap Fund	₹1,511.5	39.91%	27.24%	26.25%
   Nippon India Growth Fund	₹4,516.25	36.50%	28.61%	30.77%
   HDFC Mid-Cap Opportunities Fund	₹210.54	35.38%	29.83%	30.19%
   Quant Mid Cap Fund	₹252.62	27.22%	26.92%	34.79%

   *NAV as of 05 December 2024

Details of Top Mid Cap ULIP Funds for SIP in 2025^~

1. PNB MetLife Mid Cap Fund

   The PNB MetLife Mid Cap Fund is designed to capitalize on the growth potential of mid-sized companies in India, aiming for long-term capital appreciation. With a focus on companies ranked 101-250 by market capitalization, it offers investors exposure to high-growth opportunities in the mid-cap segment.

   Features of PNB MetLife Mid Cap Fund for SIP:

   • Objective: To achieve long-term growth by investing in mid-cap companies.

   • Benchmark: S&P BSE Midcap Index.

   • Launch Date: March 21, 2018

   • Tax Benefits: The fund is eligible for tax deductions under Section 80C and Section 10(10D). Long-term capital gains over ₹1.25 lakh are taxed at 12.5%, while short-term gains are taxed at 20% if sold within a year. 

   • Life Cover: Offers life insurance coverage alongside investment.

2. Tata AIA Life Midcap Momentum Index Fund

   The Tata AIA Life Midcap Momentum Index Fund aims to track the performance of mid-cap stocks exhibiting strong momentum characteristics. This fund is suitable for investors looking to leverage market trends for potential gains.

   Features of Tata AIA Life Midcap Momentum Index Fund for SIP:

   • Objective: To invest in the top 50 high-performing mid-cap stocks based on momentum.

   • Benchmark: Nifty Midcap 150 Momentum 50 Index.

   • Launch Date: June 16, 2025

   • Tax Benefits: Similar to other equity funds, long-term gains above ₹1.25 lakh incur a 12.5% tax, and short-term gains are taxed at 20%. The fund qualifies for tax benefits under Section 80C and Section 10(10D).

   • Life Cover: Includes life insurance benefits.

3. HDFC Life Individual Midcap Fund

   The HDFC Life Individual Midcap Fund focuses on investing in mid-cap stocks that are expected to grow significantly over time. This fund is ideal for investors seeking aggressive growth through equity investments.

   Features of HDFC Life Individual Midcap Fund for SIP:

   • Objective: To invest in mid-cap companies expected to grow substantially over time.

   • Benchmark: Nifty Midcap 150 Index

   • Launch Date: 

   • Tax Benefits: You can avail of tax deductions under Section 80C and 10(10D). Gains exceeding ₹1.25 lakh are taxed at 12.5% for long-term holdings; short-term gains face a 20% tax rate.

   • Life Cover: Provides life insurance coverage.

4. Max Life Midcap Momentum Index Fund

   The Max Life Midcap Momentum Index Fund targets mid-cap stocks that show strong upward price momentum, aiming to maximize returns through strategic investments.

   Features of Max Life Midcap Momentum Index Fund for SIP:

   • Objective: To achieve high returns through strategic investments in momentum-driven mid-cap stocks.

   • Benchmark: Nifty Midcap Momentum Index

   • Launch Date: August 16, 2025

   • Tax Benefits: Long-term capital gains over ₹1.25 lakh are taxed at 12.5%, while short-term gains are subject to a 20% tax rate.

   • Life Cover: Life insurance included in the investment plan.

5. ICICI Life Mid Cap Fund

   The ICICI Life Mid Cap Fund seeks to invest in a diversified portfolio of mid-cap stocks with high growth potential. This fund is suitable for investors looking for long-term capital appreciation.

   Features of ICICI Life Mid Cap Fund for SIP:

   • Objective: To achieve long-term capital growth through investments in promising mid-cap companies. 

   • Benchmark: Nifty Midcap Index

   • Launch Date: Oct 28, 2004

   • Tax Benefits: Long-term capital gains above ₹1.25 lakh attract a 12.5% tax, and short-term gains are taxed at 20%.

   • Life Cover: Offers additional life insurance benefits.

Details of Top Mid Cap Mutual Funds for SIP in 2025^~

1. Motilal Oswal Midcap Fund

   The Motilal Oswal Midcap Fund has been recognized for its robust performance and strategic investments in promising mid-cap stocks.

   Features of Motilal Oswal Midcap Fund for SIP:

   • Objective: Aims to generate long-term capital appreciation by investing in mid-cap companies.

   • Launch Date: February 03, 2014

   • Benchmark: Nifty Midcap 150 Index.

   • Taxation: Long-term capital gains (LTCG) above ₹1.25 lakh are taxed at 12.5% without indexation; short-term capital gains (STCG) are taxed at 20% if held for less than one year.

2. Invesco India Mid Cap Fund

   The Invesco India Mid Cap Fund aims to provide capital appreciation by investing predominantly in mid-sized companies with strong growth prospects.

   Features of Invesco India Mid Cap Fund for SIP:

   • Objective: Focuses on long-term capital growth through investments in mid-sized companies.

   • Launch Date: January 1, 2013.

   • Benchmark: BSE 150 Midcap Index.

   • Taxation: LTCG over ₹1.25 lakh is taxed at 12.5%; STCG is taxed at 20% if sold within one year.

3. Edelweiss Mid Cap Fund

   The Edelweiss Mid Cap Fund targets growth-oriented mid-cap companies, making it an attractive option for aggressive investors.

   Features of Edelweiss Mid Cap Fund for SIP:

   • Objective: Seeks to provide long-term capital appreciation by investing predominantly in mid-cap stocks.

   • Launch Date: 01 January, 2013.

   • Benchmark: Nifty Midcap 150 Index.

   • Taxation: LTCG over ₹1.25 lakh is taxed at 12.5%; STCG is taxed at 20% if held for less than one year.

4. HSBC Midcap Fund

   The HSBC Midcap Fund focuses on investing in quality mid-sized companies that are well-positioned for future growth.

   Features of HSBC Midcap Fund for SIP:

   • Objective: Aims to achieve long-term capital growth by investing in mid-cap companies with strong growth potential.

   • Launch Date: 01 January, 2013.

   • Benchmark: Nifty Midcap 150 Index.

   • Taxation: LTCG above ₹1.25 lakh is taxed at 12.5%; STCG is taxed at 20% if held for less than one year.

5. Kotak Emerging Equity Fund

   The Kotak Emerging Equity Fund is designed to invest primarily in emerging mid-cap stocks with significant growth potential.

   Features of Kotak Emerging Equity Fund for SIP:

   • Objective: Targets long-term capital appreciation through investments in emerging mid-cap companies.

   • Launch Date: 01 January, 2013.

   • Benchmark: Nifty Midcap 50 Index.

   • Taxation: LTCG over ₹1.25 lakh is taxed at 12.5% and STCG is taxed at 20% if you redeem before 1 year.

How Does Mid Cap Funds Work?

Mid cap funds are a type of mutual fund that primarily invests in mid-sized companies, which are defined by their market capitalization. 

Let us learn a brief overview of how they operate from the following:

• Focus on Mid-Sized Companies: They invest in companies ranked 101-250 by market size.

• Growth Potential: These companies are expanding and may grow faster than large companies.

• Risk and Returns: They are riskier than large-cap funds but safer than small-cap funds, offering good long-term returns.

• Diversification: Investing in many companies reduces the risk of poor performance by one.

• Active Management: Fund managers choose mid-cap companies with strong growth prospects.

• Tax Benefits: You get tax deductions on premiums paid in ULIP Plans under Section 80C, and maturity proceeds are tax-free under Section 10(10D) of the Income Tax Act, 1961.

• Ideal for Long-Term: Best for investors with medium to high risk tolerance and long-term goals.

Who Should Invest in Mid-Cap Funds?

Mid-cap funds are suitable for investors seeking higher returns and willing to take moderate risks:

• Growth-Oriented Investors: Ideal for those looking to invest in companies with high growth potential.

• Medium to High-Risk Tolerance: Suitable for investors who can handle market ups and downs.

• Long-Term Goals: Best for those with an investment horizon of 5-10 years or more.

• Wealth Accumulation: Suitable for building wealth over time, especially for future needs like buying a home or retirement.

• Portfolio Diversification: A good investment option for diversifying portfolios that already include large-cap or small-cap funds.

• Experienced Investors: Ideal for those familiar with market trends and willing to take calculated risks.

Tax on Mid-Cap Funds in 2025

In 2025, the taxation structure for mid-cap funds has undergone some changes that investors should be aware of:

• Short-Term Capital Gains (STCG): If you sell your mid-cap fund units within 12 months, the gains are taxed at 20%. This is an increase from the previous rate of 15% as per the latest budget proposals.

• Long-Term Capital Gains (LTCG): For units held longer than one year, the gains are taxed at 12.5%, up from 10%. However, this rate applies only if your gains exceed ₹1.25 lakh in a financial year.

• Impact of Holding Period: The holding period for classifying gains as long-term remains at 12 months. This means that investors need to be mindful of their investment duration to optimize tax liabilities.

• No Indexation Benefits: The revised LTCG tax does not allow for indexation benefits, which could affect the overall tax efficiency of long-term investments in mid-cap funds.

How to Invest in Mid Cap Funds for SIP through Policybazaar?

Following are the steps to invest in a mid-cap fund through SIP on Policybazaar:

• Explore SIP Options: Go to the ULIP plans section and check out the suggested top mid-cap funds for SIP based on risk and performance.

• Select a Fund: Review fund details like returns and expenses, and choose a suitable mid-cap fund.

• Create an Account: Register on Policybazaar and complete KYC using PAN and Aadhaar.

• Set Investment Amount: Enter the SIP amount (minimum ₹1,000) and select the frequency.

• Link Bank Account: Provide bank details for auto-debit and ensure sufficient funds.

• Confirm Investment: Verify details and confirm to start your SIP investment.

Benefits of Investing in Mid Cap Funds for SIP

The key benefits of investing in a mid cap funds for a SIP plan are as follows:

• High Growth Potential: Mid-cap companies are in their expansion phase and can deliver higher returns over the long term.

• Cost Averaging: SIP investments spread across market cycles, reducing the impact of market volatility.

• Disciplined Investing: SIP ensures regular, small investments, promoting financial discipline.

• Diversification: These funds invest in a range of mid-cap stocks, reducing the risk of reliance on a single company.

• Affordable Entry: SIPs allow starting with as little as ₹500–₹1,000 per month, making them accessible.

• Long-Term Wealth Creation: Ideal for investors seeking significant wealth creation over 5–10 years.

• Risk-Reward Balance: They strike a balance between higher returns (compared to large caps) and moderate risk.

Conclusion

Mid-cap funds can be a great option for SIP investments in 2025. They offer the potential for strong growth by investing in promising companies. Look for funds with a good track record and experienced managers. Make sure the fund matches your financial goals. Regularly review your investments and stay focused on the long term to get the best returns. SIP in mid-cap funds can help you grow your wealth while managing risks.