Canara Robeco Midcap Fund: Strong potential for outperformance

Canara Robeco Midcap Fund has recently completed 3 years. The fund is a top quartile performer in 2025. Midcap funds have always been very popular with retail investors. As per AMFI data, midcap funds as a category has the second highest assets under management (Rs 4.6 trillion) among all actively managed diversified equity funds. In this article we will review Canara Robeco Midcap Fund.

Why midcap?

• Greater wealth creation potential: The chart below shows the growth of Rs 10,000 investment in Nifty Midcap 150 TRI, the benchmark index of midcap stocks, versus the Nifty 100 TRI, the benchmark index of large cap stocks over the last 20 years. You can see that, based on historical data, midcaps created significantly higher wealth compared to large caps
  
  

  

  Source: NSE, Advisorkhoj Research, as on 30^th November 2025. Large caps are represented by Nifty 100 TRI. Midcaps are represented by Nifty Midcap 150 TRI



• Midcaps are relatively less researched compared to large cap stocks. Price discovery in midcaps is less efficient to large cap stocks. Fund managers can identify midcap stocks trading at discounts to their intrinsic valuations. These stocks can create alphas for your portfolios through value discovery or valuation rerating.


• Lesser drawdowns compared to small caps: The chart below shows the drawdowns of Nifty Midcap 150 TRI, the benchmark index of midcap stocks, versus the Nifty Small Cap 250 TRI, the benchmark index of small cap stocks over the last 20 years. You can see that midcaps had smaller drawdowns compared to small caps.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 30^th November 2025. Midcaps are represented by Nifty Midcap 150 TRI. Small caps are represented by Nifty Small Cap 250 TRI.



• Favourable risk return trade-off for long term investors: The table below shows the rolling returns distribution of large cap, midcap and small caps for different investment tenures over the past 20 years. You can see that Mid Cap has lesser percentage instances of negative returns compared to small cap and slightly higher than large caps, the percentage instances of 15%+ CAGR returns was significantly higher for midcaps compared to both large caps and small caps.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 30^th November 2025. Large caps are represented by Nifty 100 TRI. Midcaps are represented by Nifty Midcap 150 TRI. Small caps are represented by Nifty Small Cap 250 TRI.



• Suitable for SIPs: SIP is a very popular with retail investors for the objective of long term wealth creation. Midcaps are more volatile compared to large caps. SIPs can take advantage of volatility through Rupee Cost Average. The chart below shows the rolling SIP returns (XIRR) distribution of Nifty Midcap 150 TRI over different SIP tenures. You can see that over long SIP tenures the midcap index gave 12%+ SIP XIRR in more than 90% of the instances.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 30^th November 2025.



• More diversified sector exposure: Midcaps can provide greater exposure in compared to large cap index.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 30^th November 2025.

Canara Robeco Midcap Fund

The fund has completed 3 years and has Rs 3,997 crores of assets under management. The expense ratio of the regular plan is 1.87%. As mentioned before, Canara Robeco Midcap Fund is a top quartile performer in 2025.

Superior risk / return trade off versus midcap benchmark

The chart below shows the distribution of 1 year rolling returns of the fund versus the midcap benchmark Nifty Midcap 150 TRI since the inception of the scheme. You can see that the scheme has lesser percentage instances of negative returns versus the benchmark index and higher percentage instances of 12%+ CAGR returns.

Source: NSE, Advisorkhoj Research, as on 17^th December 2025.

Limited downside risks for investors

The chart below shows the drawdowns of Canara Robeco Midcap Fund versus the midcap benchmark Nifty Midcap 150 TRI since the inception of the scheme. You can see that the fund was able to limit downside risks for investors.

Source: NSE, Advisorkhoj Research, as on 17^th December 2025.

Limited downside risks in volatile market compared to peers

The last 15 months have been very volatile for equity markets. The fund was able to limit downside risks compared to peers in market corrections.

Source: NSE, Advisorkhoj Research, as on 30^th November 2025

Active share

The fund is overweight on sectors like industrials, technology, real estate and energy compared to the benchmark index, while underweight on financials and consumer discretionary.

Source: BSE, Canara Robeco MF, Advisorkhoj Research, as on 30^th November 2025

Why invest in midcaps now?

The valuations have moderated from peak valuations. This shows that earnings have caught up in Mid Cap Space.

Source: NSE, Advisorkhoj Research, as on 30^th November 2025

Who can find Canara Robeco Midcap Fund suitable?

• Investors seeking capital appreciation or wealth creation over long investment tenures


• Investors with very high risk appetites


• Investors with long (minimum 5 years) investment horizon


• The fund is suitable for SIP investors


• Lump sum investors can also invest in the fund if they have minimum 5 year investment horizon

Investors should consult with their financial advisors or mutual fund distributors if Canara Robeco Midcap Fund is suitable for their investment needs.