The calendar year 2025 proved to be a challenging period for investors in the Indian equity markets. While the domestic macroeconomic fundamentals remained robust, benchmark indices delivered subdued returns, with the broader market segments particularly feeling the pressure.
A Forgettable Year for Equity Markets
The Nifty 50 index managed a modest gain of 10.5% over the year, which was underwhelming by historical standards. The performance in the mid and small-cap space was even more disappointing. The Nifty Midcap 150 index rose by a mere 5.4%, while the Nifty Smallcap 250 index actually declined by 6% during 2025.
This lackluster show occurred despite strong domestic conditions. According to data from Motilal Oswal Financial Services, flows from domestic institutional investors (DIIs) reached a record high of $90.1 billion. However, this positive domestic sentiment was outweighed by significant headwinds. Record outflows of foreign capital, driven by uncertainty surrounding US tariffs and ongoing geopolitical tensions, dragged down market performance.
Mid-Cap Funds That Bucked the Trend
Even in this difficult environment, several actively managed equity mutual funds in the mid-cap category managed to generate decent returns for their unitholders. It is crucial for investors to remember that past performance is not a reliable indicator of future results. Equity returns depend on numerous variables, and predicting future market movements is impossible.
Nonetheless, examining past returns can help investors identify funds that may align with their risk tolerance and expectations. Based on their performance in the 2025 calendar year, here is a curated list of the top ten mid-cap equity mutual funds.
The Top Performers: A Detailed Breakdown
1. ICICI Prudential MidCap Fund Direct Plan Growth: This fund led the pack with an absolute return of 12% in 2025. As per Mint data dated 2 January 2026, its portfolio featured top holdings like Muthoot Finance, BSE, and Jindal Steel. The fund had significant exposure to investment services, iron & steel, and chemical manufacturing sectors.
2. Mirae Asset Midcap Fund Direct Growth: Delivering a 10% return, this fund's top holdings included Lupin, Federal Bank, and Bharat Forge. Its major sectoral bets were in biotechnology & drugs, regional banks, and software.
3. Invesco India Mid Cap Fund Direct Plan Growth: With a return of 7.6%, this fund held Federal Bank, AU Small Finance Bank, and L&T Finance prominently. It was heavily invested in regional banks, healthcare facilities, and consumer financial services.
4. HDFC Mid Cap Fund - Direct Plan: It posted a 7.5% return in 2025. Key holdings were Treps (Tri-Party Repo), Max Financial Services, and AU Small Finance Bank. The fund's top sectoral exposures were in regional banks, software & programming, and biotechnology & drugs.
5. Tata Mid Cap Fund Direct Plan Growth: This fund gave over 7% returns. Its portfolio was anchored by AU Small Finance Bank, Indian Bank, and UPL. The primary sectoral allocations were to regional banks, chemical manufacturing, and biotechnology & drugs.
6. WhiteOak Capital Mid Cap Fund Direct Growth: It generated a 6.7% return. Top holdings featured Clearing Corporation Of India, Persistent Systems, and Max Financial Services. The fund favored software & programming, biotechnology & drugs, and investment services.
7. ITI Mid Cap Fund Direct Growth: Returning 6.6%, this fund's major investments were in Federal Bank, Persistent Systems, and Coforge. It had significant exposure to consumer financial services, software & programming, and regional banks.
8. Canara Robeco Mid Cap Fund Direct Growth: The fund delivered a 5.7% absolute return. Its top holdings included Treps, Persistent Systems, and BHEL. Key sectors were software & programming, regional banks, and chemical manufacturing.
9. Aditya Birla Sun Life Mid Cap Fund Direct Plan Growth: This fund offered a 5.23% return. It held AU Small Finance Bank, Max Financial Services, and Federal Bank as top stocks. The main sectoral focuses were software & programming, regional banks, and consumer financial services.
10. Edelweiss Mid Cap Fund Direct Plan Growth Option: Rounding off the list with a 5.1% return, its portfolio highlighted Coforge, Persistent Systems, and Clearing Corporation of India. The fund was invested heavily in regional banks, software & programming, and investment services.
Key Takeaways for Investors
The data reveals common themes among the successful funds of 2025. Regional banks and the software & programming sector were consistently favored across multiple top-performing portfolios. Stocks like AU Small Finance Bank, Federal Bank, and Persistent Systems appeared frequently in the top holdings lists.
This analysis serves an educational purpose, based on data from the Mint website. The views and fund selections are from individual analysts or broking firms. Investors are strongly advised to consult with certified financial experts before making any investment decisions, as market conditions are dynamic and individual circumstances vary greatly.
