The surprising truth about 'best' mid-cap funds over 10 yrs

Summary: We tracked what would’ve happened if you kept switching to the previous year’s top mid-cap fund from 2015 to 2025, and the result is both surprising and a little humbling. Spoiler: even an average mid-cap fund would have quietly beaten this strategy over the decade, with no stress, no churn and relatively much less paperwork.

We’ve all been there. You open a fund ranking list, see a mid-cap fund that delivered a mind-boggling 50, 60, even 90 per cent returns in the past year, and think, “This is it, this is my ticket to wealth.”

It feels logical. After all, why wouldn’t you want to put your money in the fund that’s “proven” itself? But investing isn’t cricket highlights; it isn’t about who hit the biggest six last year.

While chasing top performers can feel exhilarating in the short term, in reality, it often means buying into funds after they’ve had their big run and just in time for them to cool off. The result? Lots of activity, very little advantage.

Let’s prove this with real data.

The ‘best fund every year’ experiment

Say you started investing in 2015. Being a performance-focused investor, you put your money in an active mid-cap fund that was the best performer of the previous 12 months.

• 2015: You would have picked UTI Mid Cap Fund because of its humongous 91.8 per cent return in 2014. Unfortunately, 2015 gave you just 7.5 per cent, ranking 15th out of 19 funds and failing to beat the benchmark’s 9.7 per cent.
• 2016: You’d switch to Motilal Oswal Midcap Fund, the 2015 winner. It delivered a 6.48 per cent return in 2016, again slightly below the benchmark. So you jump to HDFC Mid Cap Fund, the 2016 winner.
• 2017: HDFC Mid Cap Fund delivered a stellar 43.1 per cent return, but still underperformed the index (55.7 per cent) and ranked 14th among peers. So you move to the HSBC Midcap Fund, the top fund of 2017.
• 2018: HSBC Midcap Fund promptly lost you 11 per cent. Worse, it ranked just 10th among 21 mid-cap funds. So you switch to the only fund that delivered a positive return that year: Axis Midcap Fund.
• 2019: Finally, a win. Axis Midcap grew 12.8 per cent, handsomely beating its benchmark’s 0.7 per cent return.
• 2020: Axis again did well, delivering 27.7 per cent, but ranked just seventh. So you moved to the Covid-year darling, PGIM India Midcap Fund, which had returned a whopping 51.1 per cent in 2020.
• 2021: PGIM rewarded you with 66.9 per cent returns, staying No. 1. You stick with it.
• 2022: PGIM slipped into negative territory (-0.1 per cent), underperforming the benchmark’s 4 per cent gain. You switch to Quant Mid Cap Fund, which had delivered nearly 20 per cent in 2022.
• 2023: Quant Mid Cap gave you 36.4 per cent but ranked 18th out of 29 funds and underperformed the index’s 44.6 per cent. You jump ship to Nippon India Growth Mid Cap Fund, the 2023 topper.
• 2024: Nippon returned 27.7 per cent, ranking 20th of 29 funds. You switch again to Motilal Oswal Mid Cap Fund, the best fund of 2024.
• 2025 (YTD): Your “best fund” is down 6.3 per cent, ranking dead last.

The result: All that churn, very little gain

After 10+ years of fund-hopping, your CAGR would have been 17.68 per cent. Not bad, until you realise the benchmark Nifty Midcap 150 TRI delivered 17.62 per cent without all the chasing.

And here’s the kicker: every time you switched, you’d have triggered capital gains taxes, reducing your actual take-home returns below the index.

What if you just stayed put?

Here’s the uncomfortable truth: even an average mid-cap fund would have done better. The median mid-cap fund CAGR over this period was 16.7 per cent, and that’s before factoring in the tax you’d pay for all those switches.

So while short-termism might make for great bragging rights, it does little for your long-term wealth.

Our take

Being “lazy” in investing actually works. If you’d simply picked an average mid-cap fund and stayed invested, you’d have beaten this hyperactive strategy. With less stress, less paperwork and no tax drag.

In investing, boring often wins.

So, want to know which mid-cap funds actually suit your profile, not just last year’s chart-toppers?

That’s exactly what Value Research Fund Advisor does. Our tool goes beyond raw returns and looks at consistency, risk and portfolio quality to shortlist funds that match your investment horizon and risk appetite.

Instead of jumping from one “hot” fund to another, you get a curated, research-backed list of mid-cap funds designed to work for you over the long run. No guesswork, no hype-chasing, no tax-draining switches.

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Also read: Top mid-cap fund in the last 10 years? Bet you missed it