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.

The following five funds had the highest overlap with the Nifty Midcap 150 TRI based on their August 2026 portfolios.

*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%.

*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.

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%.