How many mid-cap funds have a perfect 5-star rating today?

Summary: Mid-cap funds have had a rough 12 months, but if you look beyond the short-term noise, the best ones have handsomely rewarded patient investors. That said, only three mid-cap funds currently hold Value Research's flawless five-star rating. Curious which ones made the list? Read on and find out why.

Mid-cap funds are not for the faint of heart. Over the last year, they've collectively returned -1.25 per cent, disappointing many investors who glance only at their recent performance.

But here’s the deal with mid-cap funds: they are built for the long run. Not one, three or even five years, but at least seven to ten years. And the numbers prove that.

Over the last 10 years, the average mid-cap fund has delivered an annualised return of 15.53 per cent between July 29, 2015, and July 29, 2025. That means an investment of Rs 1 lakh in a mid-cap fund back in 2015 would have grown to more than 4x today.

So, if you’re investing in mid-cap funds, you need to play the long game. And if you want to invest in a solid fund, here’s a starting point for your research: find out how many mid-cap funds currently hold a flawless 5-star rating from Value Research (as of June 30, 2025)?

The answer? Just three.

1. Edelweiss Mid Cap Fund

Edelweiss Mid Cap has delivered 18.82 per cent annualised returns over the past 10 years. That means a Rs 1 lakh lump sum invested a decade ago would have grown to around Rs 5.6 lakh.

Its SIP performance is even more striking: 22.71 per cent annualised. You can try our Mutual Fund Calculator to see what a monthly SIP of Rs 10,000 would have grown into, had you invested in this fund ten years back.

At this point, you may ask, “Why are SIP returns higher than lumpsum (one-off) investments?” That’s because mid-cap stocks tend to be volatile, and SIPs work in your favour during market dips, letting you accumulate more units at lower prices.

Beyond point-to-point returns, Edelweiss also shines on rolling returns, which are a better way to assess consistency. Unlike one-off snapshots that point-to-point returns provide, rolling returns measure performance across every possible period, removing the bias of specific start or end dates.

• Over the last seven years, its 3-year daily rolling return beat the Nifty Midcap 150 TRI 76.6 per cent of the time.
• Moreover, the fund delivered over 15 per cent returns roughly three-quarters of the time, while only about 9 per cent of the time did the fund deliver below 5 per cent annualised returns.

2. HDFC Mid Cap Fund

This fund is not just a long-term performer, it's a model of consistency.

Over 10 years, it has returned 18.57 per cent annually—turning Rs 1 lakh into Rs 5.48 lakh.

Its SIP returns stand at 21.61 per cent, highlighting its ability to benefit from market dips.

But what makes this fund stand out is how rarely it falters:

• 98 per cent of its three-year daily rolling return windows over the past seven years delivered more than 10 per cent returns — a remarkable feat.
• Additionally, it outperformed its benchmark (Nifty Midcap 150 TRI) in roughly 67 per cent of these windows.

That’s how HDFC Mid Cap earned its place in the 5-star club.

3. Motilal Oswal Midcap Fund

Motilal Oswal’s Midcap Fund is the fifth-best 10-year performer, with 18.43 per cent annualised returns.

But what truly sets this fund apart is its SIP performance. It boasts the highest SIP return in the mid-cap universe, at 23.38 per cent annualised.

Its rolling returns reflect a slightly bumpier ride, though:

• Although it has outperformed the benchmark in 75 per cent of the daily windows, it has delivered over 15 per cent returns just 56 per cent of the times. That said, its recent years have been particularly strong, pulling up its ratings.

Our take

The Value Research Fund Rating is a purely quantitative metric that measures risk-adjusted returns. No human bias, no subjective judgement. Just data. A five-star fund is one that has delivered high returns with consistency and discipline.

But remember: ratings are just a starting point.

At Value Research, we believe choosing the right fund involves more than chasing past returns or chasing stars. You must align your investments with your goals, risk tolerance and holding period. And above all, think long term.

Can you start an SIP in any of these three mid-cap funds?

Try Value Research Fund Advisor. Our analysts have drawn up a recommendation list of mid-cap funds there. Not just that, we also have drawn a curated list for large-cap and small-cap funds as well. 

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