Stock Market: Mid-Cap Mutual Funds Surge in 2026 — Top Schemes Deliver Up to 30% Returns

Mid-Cap Mutual Fund: With the start of 2026 in the Indian stock market, investors have once again turned to mid-cap mutual funds. Market experts believe that mid-cap companies (those ranked 101st to 250th in terms of market capitalization) offer a perfect balance between the stability of large-caps and the buoyant momentum of small-caps. In 2026, as core sectors of the Indian economy, such as infrastructure and manufacturing, have seen a boom, select mid-cap funds have surprised everyone with their returns.

Top Performing Mid-Cap Funds of 2026

Based on the latest data for February 2026 and the average annual returns (CAGR) over the past 3 to 5 years, here’s a comparative breakdown of the performance of leading funds:

Motilal Oswal Midcap Fund

This fund remains the undisputed king of the mid-cap category in 2026. It has delivered a robust return of approximately 30.38% over the past 3 years. Its 5-year CAGR is also close to 25.30%. With a high alpha and Sharpe Ratio, this fund is ideal for investors seeking aggressive growth with a slightly higher risk profile.

Edelweiss Mid Cap Fund

Edelweiss has distinguished itself in terms of stability and consistency. This fund has delivered an annualized return of 25.16% over 5 years. According to the February 2026 report, its 10-year SIP return also topped the category at 21.4%.

HDFC Mid-Cap Opportunities Fund

With a massive asset under management (AUM) of over ₹92,000 crore, this fund is known for its stability. It has delivered a return of 26.84% over the past three years. Its biggest strength is its ability to provide strong protection to portfolios during market downturns.

Nippon India Growth Fund

This fund has never disappointed long-term investors. Its 5-year average return through 2026 is 23.09%. This fund primarily focuses on mid-cap companies that have the potential to become large-cap stocks in the future.

Quant Mid Cap Fund

Due to its dynamic and data-driven investment model, Quant has delivered impressive returns of 32.10% over 5 years. While its recent one-year performance has seen a slight slowdown, it still holds a top position in terms of long-term track record.

Why are mid-cap funds attractive in 2026?

According to financial experts, mid-cap companies are likely to benefit in 2026 due to two main reasons. First, the increasing consumption power of the Indian middle class has led to a sharp improvement in the profits of mid-sized consumer goods companies.

Second, stable interest rates and the government’s PLI schemes are benefiting mid-cap manufacturing companies the most. This is why a monthly SIP of ₹10,000 over the past 10 years has created a massive corpus of ₹35 lakh to ₹37 lakh across several mid-cap funds.

How to choose the right fund?

The secret to success in mid-cap investing is patience. Experts recommend investing in this category with a horizon of at least 7 to 10 years. Since mid-cap funds are more volatile than large-cap funds, adopting the SIP route instead of a lump sum investment is the best way to minimize risk. If you want a balance between safety and returns, funds like HDFC or Nippon are better, and if your risk appetite is higher, you can go with funds like Motilal Oswal or Quant.