Last Updated on August 22, 2022 at 11:13 pm
In this report, we evaluate how actively managed midcap mutual funds have fared against the Nifty Next 50 Total Returns Index. We identify four midcap mutual funds have outperformed the Nifty Next 50 total returns index consistently.
In the Handpicked List of Mutual Funds Oct-Dec 2020 (PlumbLine) edition, we pointed out that we will be reevaluating midcap mutual funds vs Nifty Next 50 index. Nifty Next 50 has a risk and reward almost identical to that of the Nifty Midcap 150 Index. As we just saw in the Nippon India Nifty Smallcap 250 Index Fund Review. Therefore it is natural such a comparison is made.
Remember that although SEBI defines Nifty Next 50 stocks as part of the large cap universe, it is illiquid (high impact cost) and therefore quite volatile as explained before Warning! Even “large cap” stocks are not liquid enough! Can you handle this?
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Want to create a complete financial plan? Learn goal-based investing? Exclusive access to our DIY tools? Increase your income with your skills? Enjoy massive discounts on our robo-advisory tool & courses! 🔥
We shall consider rolling returns. That is, we shall compare every possible 1,2,3,4 and 5 year return periods possible from 1st Jan 2013 (from the inception of direct plans) to Sep 29th 2020. We shall only consider funds that have enough history to generate 1000 or more 1,2 and 3-year rolling return data points.
This is the full list of 22 midcap funds considered for the study. Among these, Edelweiss Mid Cap Fund, IDBI Midcap Fund and Mahindra Unnati Emerging Business Yojana were removed as the no of rolling return one-year data points were less than thousand (young funds with short history). DHFL Pramerica Midcap Opportunities Fund was also not considered as its 3-year history resulted in less than a thousand data points. These funds are indicated in red below.
| DSP Midcap Fund – Direct Plan – Growth |
| Invesco India Midcap Fund – Direct Plan – Growth Option |
| L&T Mid Cap Fund-Direct Plan-Growth |
| Kotak Emerging Equity Scheme – Growth – Direct |
| Axis Midcap Fund – Direct Plan – Growth |
| Franklin India Prima Fund – Direct – Growth |
| Taurus Discovery (Midcap) Fund-Direct Plan-Growth Option |
| Tata Mid Cap Growth Fund – Direct Plan Growth |
| HDFC Mid Cap Opportunities Fund -Direct Plan – Growth Option |
| Motilal Oswal Midcap 30 Fund (MOF30)-Direct Plan-Growth Option |
| BNP Paribas Mid Cap Fund – Direct Plan – Growth Option |
| Sundaram Mid Cap Fund- Direct Plan – Growth Option |
| Aditya Birla Sun Life Midcap Fund – Growth – Direct Plan |
| UTI Mid Cap Fund-Growth Option- Direct |
| SBI Magnum MIDCAP FUND – DIRECT PLAN – GROWTH |
| Nippon India Growth Fund – Direct Plan Growth Plan – Growth Option |
| Baroda Mid-cap Fund- Plan B (Direct) – Growth Option |
| Quant Mid Cap Fund-Growth Option-Direct Plan |
| DHFL Pramerica Midcap Opportunities Fund – Direct Plan – Growth Option |
| Edelweiss Mid Cap Fund – Direct Plan – Growth Option |
| IDBI Midcap Fund Growth Direct |
| Mahindra Unnati Emerging Business Yojana – Direct Plan – Growth |
Five years: 12/19 funds have outperformed Nifty Next 50 (NN50)with a consistency of 70% or more. For example, DSP Midcap Fund got a better return than NN50 over five years 676 out of 676 times or 100%. Let us call this performance consistency. HDFC Mid Cap Opportunities Fund beat NN50 495 out of 677 times equivalent to a performance consistency of 73%
Four years: Only 6/17 funds managed 70% or more performance consistency!
Three years: Only 4/17 funds managed 70% or more performance consistency!
These are the four funds that qualified as above over 5 and 4 and 3 years.
| L&T Mid Cap Fund-Direct Plan-Growth |
| Kotak Emerging Equity Scheme – Growth – Direct |
| DSP Midcap Fund – Direct Plan – Growth |
| Invesco India Midcap Fund – Direct Plan – Growth Option |
What do these results mean? Please do not rush to invest in these funds! These results only reiterate what we have been saying for a while: Those who want midcap (or small cap) exposure need not look beyond Nifty Next 50 passive funds. See: Combine Nifty and Nifty Next 50 funds to create large, mid cap index portfolios and What is the best way to invest in Nifty Next 50 Index? and ICICI Nifty Next 50 Index Fund vs Nippon India ETF Junior BeEs
Investors are better off with a Nifty Next 50 index fund than a Nifty Midcap 150 index fund or active midcap funds since it is impossible to predict which active fund would outdo NN50 in future.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: To get in touch, use this contact form. (Sponsored posts or paid collaborations will not be entertained.)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)