Mid-cap mutual funds — which invest in companies ranked between 101st and 250th by market capitalisation — have long been viewed as the “sweet spot” of equity investing, offering a balance between growth and stability. After years of stellar performance, these funds are now under closer scrutiny as valuations stretch and returns begin to show early signs of moderation. Advertisement

While mid-cap valuations are indeed elevated compared to historical norms, analysts suggest they remain a viable option for investors with patience, discipline, and a long-term approach. However, this phase calls for measured allocation and stronger risk management, especially as markets adjust to premium valuations and potential volatility.

Over the last decade, mid-cap funds have outperformed their large-c

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