Mid cap fund delivers 22.2% annual returns over 30 years

Nippon India Growth Mid Cap Fund, a mid-cap mutual fund launched in 1995, has completed an impressive 30-year journey, delivering a stellar compounded annual growth rate (CAGR) of 22.2% since inception. This means that an initial investment of ₹1 lakh made at launch would be worth over ₹4 crore today. Such consistent, long-term performance highlights the wealth creation potential of equity mutual funds, particularly in the mid-cap segment, for investors with a long-term horizon and the ability to withstand moderate to high levels of risk.

The fund’s success can be attributed to a combination of rigorous bottom-up stock selection, a diversified portfolio construction, and a disciplined approach to valuations. It has consistently maintained exposure to high-potential sectors, with financials making up around 25% of the portfolio, followed by consumer discretionary and industrials. Diversification across sectors like healthcare, technology, energy, and materials has also played a key role in enhancing returns while managing risk.

A defining feature of the fund is its well-defined risk management framework, which aligns with its mandate and the risk appetite of its investors. The investment team emphasizes the longevity of earnings, the quality of management, and a clear understanding of valuation metrics, which collectively contribute to prudent decision-making and long-term outperformance.
Over the years, other mid-cap funds have also shown strong performance, with many delivering 17–19% CAGR over the last decade. Analysts believe that disciplined investment strategies, deep research, and a long-term investment approach are critical to generating such returns.

For investors looking to benefit from India’s growth story, mid-cap funds like this one can be a valuable part of a diversified portfolio, offering the potential for higher capital appreciation over the long run.