HDFC Mid Cap Fund has crossed ₹1 trillion in assets, becoming the largest in its category after two decades of operation. Managed by Chirag Setalvad since 2007, the fund maintains a long-term strategy with a low portfolio turnover. Its performance has rebounded significantly following a period of underperformance between 2016 and 2021, consistently outperforming its benchmark in recent years.
HDFC Mid Cap Fund has reached a major milestone, crossing ₹1 trillion in assets under management (AUM) as of June 2026. This achievement makes it the third scheme from HDFC Mutual Fund to reach this size, joining the HDFC Flexi Cap Fund and HDFC Balanced Advantage Fund. It currently stands as the largest fund in the mid-cap category, significantly outpacing the second-largest fund, which holds approximately ₹67,600 crore.
Two Decades of Fund Management
Since its launch in June 2007, the fund has maintained leadership stability with Chirag Setalvad, Head of Equities at HDFC AMC, managing the portfolio since inception. This long-term oversight has been a key factor in its investment approach. The fund focuses on a bottom-up strategy, specifically targeting companies ranked between the 101st and 250th positions by market capitalization. With a portfolio turnover ratio historically ranging between 5% and 20%, the fund demonstrates a buy-and-hold philosophy, preferring to remain fully invested rather than holding significant cash.
Performance and Portfolio Dynamics
While the fund experienced a challenging phase of relative underperformance between 2016 and 2021, it has since seen a notable recovery. Data shows that on a rolling three-year basis, the fund has outpaced the Nifty Midcap 150 – TRI and the average for its category by 2% to 3%. Its risk-adjusted returns, measured by Sharpe and Sortino ratios, remain higher than the benchmark average, suggesting that the fund has historically managed volatility better than many of its peers.
As of June 2026, the portfolio is diversified across 76 stocks. To manage risk, the fund limits exposure to any individual stock to less than 5%. The holdings reflect a sector preference for banking, auto ancillaries, healthcare, finance, information technology, and consumption, which together make up 67.4% of the assets. While the fund is mandated to keep at least 65% in mid-cap companies, its current composition includes 63.2% in mid-caps, 10.7% in large-caps, and 18.2% in small-caps.
Investors monitoring this fund may look toward the sustainability of its recent outperformance in a competitive mid-cap market. The key monitorable remains how the fund manager balances its large asset base with the liquidity constraints often found in mid-sized company stocks, as well as its ability to maintain superior risk-adjusted returns relative to its benchmark during broader market volatility.