Synopsis : HDFC Mid Cap Fund has maintained its reputation by consistently delivering above-average returns while managing volatility better than peers. Backed by a high-conviction, bottom-up strategy, it offers patient investors a path to capture the next wave of India’s emerging leaders.
Midcap funds are often seen as the breeding ground for tomorrow’s bluechips, and HDFC Mid Cap Fund has emerged as a strong contender in this space. Launched in June 2007 and managed by veteran Chirag Setalvad since inception, the fund has showcased resilience, delivering a 19.97% CAGR since launch, making it a popular choice among growth-oriented investors.
As of May 2025, the fund’s Rs 797 billion AUM is the highest in its category, reflecting investor trust in its buy-and-hold, bottom-up approach. It invests primarily in mid-cap stocks (companies ranked 101st to 250th by market capitalisation), focusing on strong fundamentals, sound financials, and sustainable business models at reasonable valuations. This disciplined strategy allows the fund to perform well across market cycles while limiting downside during volatile phases.
Despite underperformance in the midcap category between 2016 and 2021, the fund has made a strong comeback. On a rolling 3-year basis, it has outperformed the Nifty Midcap 150 TRI and category average by 4-5%, and its superior Sharpe and Sortino ratios reflect its effective risk-adjusted returns.
Its portfolio of 76 diversified stocks includes top holdings like Max Financial Services, Federal Bank, and Coforge, with significant allocations across auto ancillaries, banking, IT, and healthcare. With 64.3% in mid-caps, 20.6% in small caps, and 5.4% in large caps, the fund ensures diversified exposure while remaining committed to its midcap focus.
HDFC Mid Cap Fund’s low turnover ratio of 20-30% underscores its conviction-led investing style. While it may underperform in momentum-driven short-term rallies, it is well-positioned for long-term investors seeking high-growth potential and are comfortable with higher volatility.
For investors with a high-risk tolerance, HDFC Mid Cap Fund provides an opportunity to benefit from India’s structural growth story while balancing risks with prudent stock selection and diversification.
Disclaimer : This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.
