5 High-Performing Midcap Mutual Funds for 2025 (Rolling Returns Analysis)

Midcap mutual funds continue to be one of the most exciting investment categories for Indian investors in 2025. They offer a sweet balance between the safety and scale of large caps and the explosive growth potential of small caps. For investors with a moderate-to-high risk appetite and a time horizon of at least 5–7 years, midcap funds can play a pivotal role in wealth creation.

But selecting the right midcap fund isn’t easy. Past annualised returns often paint only a partial picture. To cut through the noise, this article looks at rolling returns over the last decade, which provide a more reliable measure of consistency across different market cycles. Based on this approach, here are the five best midcap mutual funds to consider in 2025.

What Are Rolling Returns in Mutual Funds?

Rolling returns are a method of calculating returns for overlapping periods within a chosen timeframe. Instead of picking one start and end date, rolling returns analyse multiple 3-year or 5-year windows to show how a fund performed across market phases.

For example, a 10-year dataset can have hundreds of 3-year or 5-year rolling periods. Looking at median rolling returns offers a clearer picture of what an investor might typically experience, rather than relying on best- or worst-case scenarios. This makes rolling returns a more trustworthy yardstick than simple trailing returns.

How We Filtered These Funds

The shortlisting process for this article followed strict criteria to maintain objectivity:

• Considered only Direct – Growth plans.
• Analysed performance between 27 August 2015 and 26 August 2025.
• Measured both 3-year and 5-year rolling returns across this period.
• Preferred funds with high median rolling returns and strong average performance.
• Favoured funds that delivered more than 20 percent returns in a large share of rolling periods.
• Excluded schemes with governance concerns or weak performance in the last two years (for example, Quant Midcap Fund).
• Shortlisted funds that balanced returns, consistency, and risk control.

This balanced approach ensures investors get a list of funds that are not only top performers but also dependable for the long haul.

The 5 Best Midcap Mutual Funds in 2025

1. Edelweiss MidCap Fund (Direct Growth)

• 3-Year Average Rolling Return: 20.22%
• 5-Year Average Rolling Return: 21.94%
• Highlight: Delivered over 20% in nearly half of all 5-year rolling windows.

Edelweiss MidCap Fund has demonstrated steady strength across market cycles. Its rolling medians and upside capture ability make it a strong core holding in the midcap space. While short-term volatility is expected, the fund’s discipline and performance consistency make it suitable for investors with a 5 -7 year horizon.

2. Nippon India Growth Mid Cap Fund (Direct Growth)

• 3-Year Average Rolling Return: 19.92%
• 5-Year Average Rolling Return: 21.21%
• Highlight: Over 43% of its 5-year windows delivered above 20%.

This is one of the oldest and most trusted midcap schemes in India. With broad sector exposure and a long record of outperformance, it appeals to investors seeking a diversified approach. However, it may be more volatile than peers during market downturns, so SIP investments over the long term work best.

3. Invesco India MidCap Fund (Direct Growth)

• 3-Year Average Rolling Return: 19.65%
• 5-Year Average Rolling Return: 20.93%
• Highlight: Very low negative periods across rolling windows.

Invesco India MidCap Fund is known for stability and consistency. Its disciplined investment style means it rarely delivers negative outcomes, even during corrections. This makes it a reliable choice for first-time midcap investors or those preferring smoother compounding over aggressive alpha generation.

4. Motilal Oswal Midcap Fund (Direct Growth)

• 3-Year Average Rolling Return: 20.58%
• 5-Year Average Rolling Return: 21.14%
• Highlight: Captures strong upside with focused high-conviction bets.

Built on the QGLP (Quality, Growth, Longevity, Price) framework, Motilal Oswal Midcap Fund has shown impressive alpha in bull markets. While its concentrated approach can lead to short-term volatility, it suits investors who can combine it with a steadier core midcap holding.

5. PGIM India Midcap Fund (Direct Growth)

• 3-Year Average Rolling Return: 19.09%
• 5-Year Average Rolling Return: 20.86%
• Highlight: Highest share of >20% outcomes in 5-year rolling windows (61%).

PGIM India Midcap Fund stands out for its consistency. More than 60% of 5-year rolling periods delivered over 20 percent returns, which is outstanding for long-term compounding. Though near-term returns may fluctuate, its long-term performance makes it a solid pick for disciplined SIP investors.

Why These Funds Stand Out

What unites these five funds is a mix of strong rolling returns, high frequency of outperforming windows, and solid fund management practices.

• Edelweiss and Motilal Oswal appeal to those seeking strong upside potential.
• Nippon India Growth offers diversification and legacy trust.
• Invesco India MidCap suits conservative midcap investors.
• PGIM India Midcap provides unmatched consistency for SIP-led wealth creation.

Together, they provide a balanced shortlist catering to different investor profiles.

Who Should Invest in Midcap Mutual Funds?

Midcap mutual funds are best suited for:

• Investors with a 5 -10 year horizon aiming for high long-term growth.
• Those comfortable with moderate – to-high volatility in the short term.
• SIP investors looking to benefit from rupee-cost averaging.
• Individuals wanting to diversify beyond large-cap heavy portfolios.

These funds are not ideal for investors with low risk tolerance or those with short investment timelines.

Risks to Consider

While midcap funds have historically outperformed over long horizons, they do carry certain risks:

• Greater volatility compared to large-cap funds.
• Performance may lag during narrow large-cap-led bull markets.
• Concentrated strategies (like Motilal Oswal) may deliver sharper drawdowns.
• Economic slowdowns can disproportionately affect mid-sized companies.

Investors must stay patient, avoid panic exits during corrections, and stick to SIPs or staggered investments.

Conclusion

The five midcap mutual funds highlighted here Edelweiss MidCap, Nippon India Growth Mid Cap, Invesco India MidCap, Motilal Oswal Midcap, and PGIM India Midcap stand out in 2025 for their strong rolling returns and consistency. Each offers a unique blend of growth potential, risk profile, and long-term compounding ability.

For investors seeking to build wealth over the next decade, midcap mutual funds remain an attractive choice. As always, align your fund selection with your risk appetite and time horizon, and review your portfolio annually to ensure it remains on track with your goals.