More multibaggers = Better mid-cap returns? Not quite

Summary: For mid-cap funds, finding multibaggers is no uphill task. However, does the number of such stocks in a mid-cap fund’s portfolio decide its returns? We assess the funds’ long-term performance to give our verdict. For equity mutual funds, the quality of their stock holdings plays a crucial role in shaping returns. And if a fund has several multibaggers (stocks that compound investors’ wealth multiple times) they should enhance its performance, right? Not really. Hunting for multibaggers isn’t a Himalayan task, particularly for mid-cap funds. However, has it meaningfully improved outcomes? This is what we have set out to explore in this story. Multibaggers count only if they are sized right To find out, we analysed mid-cap funds that held the most stocks delivering at least a threefold return between December 2019 and December 2025, equivalent to an annualised gain of 44 per cent or more. We then assessed how many of these multibaggers were backed with high conviction, defined as portfolio allocations exceeding 1 per cent. Size matters when it comes to multibaggers Despite their large number, not all multibaggers had substantial allocations in the mid-cap funds’ portfolios Fund name Number of multibaggers Number of multibaggers with an allocation of at least 1% High conviction bet (%) Nippon India Growth Mid Cap 31 22 71 HSBC Midcap 29 23 79.3 Franklin India Mid Cap 28 26 92.9 HDFC Mid Cap 28 23 82.1 Aditya Birla Sun Life Mid Cap 27 21 77.8 Edelweiss Mid Cap 26 24 92.3 Axis Midcap 25 22 88 Kotak Midcap 24 22 91.7 Mirae Asset Midcap 21 18 85.7 ICICI Prudential Midcap 21 12 57.1 Data from December 2019 to December, 2025; Only the top 10 actively managed mid-cap funds with the most multibaggers within the category were considered. Stocks that tripled in this period were considered multibaggers. At first glance, the numbers above