Top 5 mid-cap mutual funds with the highest and lowest benchmark overlap: Do more active bets mean better returns?
Investors often assume that an actively managed mutual fund will differ significantly from its benchmark, as the fund manager has the flexibility to change allocations and take active bets in an attempt to generate higher returns.
But portfolio data for mid-cap funds shows that the difference can be quite significant across schemes, with a few funds having more than half of their portfolio overlapping with the Nifty Midcap 150 TRI.
Portfolio overlap refers to the percentage of a fund’s holdings that are also present in its benchmark index. According to a Value Research post on X, “mid-cap fund overlap with the Nifty Midcap 150 TRI ranges from 11.6% to 51.9%”.
This matters because the benchmark itself consists of 150 mid-cap stocks, while SEBI rules require mid-cap funds to invest at least 65% of their assets in mid-cap stocks.
According to the latest AMFI data, there are a total of 34 mid-cap funds. Here are the 5 funds with the highest and lowest benchmark overlap.
Which mid-cap funds have the highest benchmark overlap?
The following five funds had the highest overlap with the Nifty Midcap 150 TRI based on their August 2026 portfolios.
| Mid-cap funds | Benchmark overlap (Nifty 150 TRI) | 1-year return |
| Edelweiss Mid Cap Fund | 51.9% | 6.45% |
| ITI Mid Cap Fund | 45.9% | 10.35% |
| Nippon India Growth Mid Cap Fund | 45.5% | 6.37% |
| Sundaram Mid Cap Fund | 44.0% | 5.30% |
| PGIM India Midcap Fund | 43.3% | -0.51% |
*Source: Value Research, Based on August 2026 portfolio disclosures, Direct plans, Returns as on 18 September 2026
Edelweiss Mid Cap Fund had the highest overlap at 51.9%. However, a higher overlap did not translate into the lowest return within this group.
ITI Mid Cap Fund delivered the highest one-year return among these five at 10.35%, while PGIM India Midcap Fund is the only fund to post a negative one-year return of 0.51%.
Which mid-cap funds are taking more active bets?
| Mid-cap funds | Benchmark overlap | 1-year return |
| Quant Mid Cap Fund | 11.6% | 3.56% |
| Taurus Mid Cap Fund | 18.1% | 3.59% |
| Motilal Oswal Midcap Fund | 20.7% | -2.02% |
| Helios Mid Cap Fund | 25.3% | 13.31% |
| HSBC Midcap Fund | 26.5% | 18.65% |
*Source: Value Research, Based on August 2026 portfolio disclosures, Direct plans, Returns as on 18 September 2026
Across all 34 mid-cap funds, Quant Mid Cap Fund has the lowest overlap at 11.6%. This suggests that the fund manager is taking more active bets. However, this did not translate into the best one-year return.
HSBC Midcap Fund delivered the highest one-year return with 26.5% overlap with the benchmark.
Does lower benchmark overlap mean better returns?
Not necessarily.
Quant Mid Cap Fund, Taurus Mid Cap Fund, and Motilal Oswal Midcap Fund, which feature among the five funds with the lowest benchmark overlap, delivered lower one-year returns than several funds in the high-overlap category.
For example, Quant Mid Cap Fund had the lowest overlap at 11.6%, but its one-year return is just 3.56%.
For investors, benchmark overlap is therefore better viewed as an indicator of how differently a fund is positioned from its benchmark, rather than as a measure of whether the fund will outperform.
A lower overlap indicates that the fund manager is taking more active positions outside the benchmark’s constituents or assigning different weights to them. That can create greater divergence from the index—both on the upside and downside.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.
