Mumbai: Equity Mutual Fund inflows have been falling for several months, signalling a clear shift in investor behaviour. According to the latest data released by the Association of Mutual Funds in India (AMFI), net investments in equity mutual funds dropped by 19% in October 2025 compared to September. As a result, investors are actively diversifying their portfolios and moving towards more balanced and growth-oriented categories.
Mid-Cap & Flexi-Cap Funds Take Centre Stage
For a long time, large-cap and small-cap funds dominated investor portfolios. But changing market conditions have prompted investors to rethink their strategy. The October data shows a significant rise in interest for Flexi-Cap and Mid-Cap Mutual Funds, both considered stronger options in a volatile market.
Flexi-cap funds—thanks to their ability to invest across market capitalisations—have emerged as the top choice.
- September inflows: ₹7,029 crore
- October inflows: ₹8,929 crore
Mid-cap funds followed closely with ₹3,807 crore invested in October—the second-highest among all equity fund categories.
In contrast, large-cap and small-cap funds recorded steep declines, as investors opted for more flexible and growth-centric alternatives.
Mid-Cap Funds Delivering Strong Multi-Year Returns
Mid-cap funds have consistently delivered impressive long-term returns, which explains their rising popularity.
Over the last three years:
- Nippon India Mid Cap Fund (Growth) delivered an exceptional 25.13% return.
- UTI Mid Cap Fund gave 21.22% returns.
- DSP Mid Cap Fund returned 18.44%.
Out of 35 mid-cap schemes, only five have returned less than 20%, and even the lowest performer delivered above 15%—a sign of strong, broad-based performance in this category.
One of the standout performers, Nippon India Growth Mid Cap Fund, launched over 30 years ago, has delivered an impressive 22.28% CAGR since inception, reflecting disciplined research, robust risk management, and a clearly defined investment strategy.
In comparison, the Franklin India Mid Cap Fund, which recently completed 33 years, has generated a 19.21% CAGR since inception.
Why Mid-Cap Funds Are Ideal for Long-Term Investors
Market analysts widely agree that mid-cap funds are best suited for long-term wealth creation. These funds prioritise capital appreciation by investing in companies with high growth potential.
Key advantages include:
- High growth opportunities
- Strong returns over extended periods
- Better diversification across sectors
- Lower portfolio risk when combined with other categories
As investors seek more resilient and balanced strategies, mid-cap and flexi-cap funds are expected to maintain their dominance in the coming months.
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