Introduction
Mid-cap equity funds are often seen as a sweet spot — not as safe as large-cap funds, but with more potential upside. Among these, Kotak Midcap Fund is one of the most established and popular options. In this article, we’ll walk through what makes this fund special, how it has performed, what its risks are, and whether it’s a good pick for you in 2025. The Kotak Midcap Fund is known for its diversified mid-cap portfolio with potential for growth balanced by market volatility. Expert investors consider KMF a strong contender for aggressive portfolios seeking long-term capital appreciation, but it requires careful risk evaluation due to mid-cap market swings. Always consult a financial advisor to align with personal investment goals.
1. What Is Kotak Midcap Fund?
- Fund Name: Kotak Midcap Fund
- Fund House: Kotak Mahindra Mutual Fund
- Type: Open-ended Equity – Mid Cap fund
- Inception Date: March 30, 2007
- Fund Manager: As per Kotak, Atul Bhole manages the fund.
- Exit Load: 1% if redeemed within 1 year.
2. What Is the Goal / Strategy of the Fund?
- The fund’s primary objective is to generate long-term capital appreciation by investing mostly in mid-cap companies (i.e., companies that are not very large, but also not very small) through equity and equity-related instruments.
- It may also invest some portion in debt or money-market instruments for tactical reasons, but its core is equity.
- The fund leans on fundamental research to pick quality mid-cap companies that have strong business models and growth potential.
3. Key Metrics & Data (as of 2025)
Here are some important data points (based on the latest publicly available figures):
| Metric | Value / Insight |
|---|---|
| Fund Size / AUM | ~ ₹ 60,385 crore for Kotak Midcap Fund (as of Oct 31, 2025) for the direct plan. For Regular plan, Kotak MF lists the AUM as ~ ₹ 58,299 crore. |
| Expense Ratio | – Direct Plan: ~ 0.37% as on Oct 31, 2025. – Regular Plan: ~ 1.38% (as per Kotak MF) for Regular Growth. |
| Volatility / Risk Ratios (from Kotak factsheet) | – Standard Deviation: ~ 15.02 – Beta: ~ 0.96 (which means risk is close to market / mid-cap benchmark) – Sharpe Ratio: ~ 0.25 (moderate risk-adjusted returns) |
| Performance (CAGR) | From Kotak’s factsheet (as of Aug 31, 2025): – 1 Year: –0.04% – 2 Years: 21.73% – 3 Years: 20.48% – 5 Years: 27.34% From Kotak MF website (Direct Growth): Since inception return is ~ 20.90%, 5-year return ~26.57%. Kotak Mutual Fund |
| Rolling Returns (Direct Growth) | As of Oct 31, 2025: 10-year average return ~ 21.64%, 7-year ~ 19.58%, 5-year ~ 20.75%, 3-year ~ 21.98%. Kotak Mutual Fund |
| Top 10 Holdings (as per Kotak factsheet) | Some of the major holdings: – Fortis Healthcare Ltd (4.0%) – GE Vernova T&D India Ltd (3.8%) – Dixon Technologies India Ltd (3.2%) – Mphasis Ltd (3.2%) – Swiggy Ltd (3.0%) – J.K. Cement Ltd (3.0%), etc. Kotak Midcap |
4. Performance Analysis: Strengths & Trends
RETURNS (NAV as on 20th November, 2025)
| Period Invested for | ₹10000 Invested on | Latest Value | Absolute Returns | Annualised Returns | Category Avg | Rank within Category |
|---|---|---|---|---|---|---|
| 1 Week | 13-Nov-25 | 10034.70 | 0.35% | – | 0.65% | 27/31 |
| 1 Month | 20-Oct-25 | 9954.60 | -0.45% | – | 1.11% | 29/32 |
| 3 Month | 20-Aug-25 | 10049.30 | 0.49% | – | 2.39% | 28/31 |
| 6 Month | 20-May-25 | 10959.80 | 9.60% | – | 8.59% | 11/31 |
| YTD | 01-Jan-25 | 10280.10 | 2.80% | – | 3.39% | 15/30 |
| 1 Year | 19-Nov-24 | 10744.00 | 7.44% | 7.42% | 7.79% | 15/30 |
| 2 Year | 20-Nov-23 | 14687.00 | 46.87% | 21.16% | 20.01% | 12/30 |
| 3 Year | 18-Nov-22 | 18266.30 | 82.66% | 22.17% | 22.23% | 14/28 |
| 5 Year | 20-Nov-20 | 30366.30 | 203.66% | 24.86% | 23.90% | 11/25 |
| 10 Year | 20-Nov-15 | 52729.60 | 427.30% | 18.07% | 16.48% | 6/21 |
| Since Inception | 30-Mar-07 | 138510.00 | 1285.10% | 15.13% | 18.09% | 25/32 |
- Strong Long-Term Returns
- Over 5 years, the fund has delivered ~27.34% CAGR (as per Kotak Midcap factsheet) which is very attractive for a mid-cap equity fund. Kotak Midcap
- In the direct plan (growth), its rolling returns over 5 years are ~20.75%. Kotak Mutual Fund
- Risk-Adjusted Return
- The standard deviation (~15) shows that while the fund is volatile (as expected for mid-cap), it’s not excessively wild. Kotak
- According to a Financial Express article, Kotak Midcap has managed to maintain a good risk-reward balance: low churn, a buy-and-hold style, and decent Sharpe/Sortino ratios.
- Recent Turnaround & Smart Moves
- Value Research Online highlights that over the last one year, the fund has “bounced back” strongly.
- The fund manager, Atul Bhole, made some well-timed moves: he didn’t move to cash aggressively even when others were worried, and redeployed intelligently.
- These moves helped Kotak Midcap improve its quartile rank and outperform many peers.
- Large AUM, but Still Growth-Oriented
- With AUM hovering around ₹ 60,000+ crore, the fund has scale and trust.
- Despite its size, it continues to deploy into growth mid-cap opportunities rather than just sticking to blue-chips.
5. Risk & Challenges
While Kotak Midcap Fund is promising, there are several risks and challenges that investors should be aware of:
- Mid-Cap Risk: As a mid-cap fund, the underlying companies are more sensitive to economic cycles than large-caps. Growth can be more volatile.
- Liquidity Risk: Some mid-cap stocks might have lower liquidity, which could impact exits.
- Manager Risk: While Atul Bhole has made smart calls recently, fund performance is always dependent on the strategy and decisions of the management team.
- High AUM Pressure: With increasing size, generating alpha can be harder because deploying large amount of money into smaller high-growth companies may become difficult.
- Exit Load: There is a 1% exit load if exits happen within a year.
- Regulatory Risk & Market Risk: As with all equity funds, regulatory changes or economic downturns can impact performance.
6. Who Is This Fund Good For?
| Stock Invested in | Sector | Value(Mn) | % of Total Holdings | 1M Change | 1Y Highest Holding | 1Y Lowest Holding | Quantity | 1M Change in Qty |
|---|---|---|---|---|---|---|---|---|
| Fortis Healthcare Ltd. | Hospital | 25294.2 | 4.19% | 0.08% | 4.19% (Oct 2025) | 3.13% (Nov 2024) | 2.47 Cr | 0.00 |
| GE T&D India Ltd. | Heavy electrical equipment | 23866.3 | 3.95% | 0.01% | 3.95% (Oct 2025) | 1.48% (Nov 2024) | 78.57 L | 96.45 k |
| Mphasis Ltd. | Computers – software & consulting | 18228.1 | 3.02% | 0.02% | 3.41% (Jan 2025) | 2.98% (Feb 2025) | 65.94 L | 0.00 |
| Dixon Technologies (India) Ltd. | Consumer electronics | 17104.6 | 2.83% | -0.26% | 3.24% (Jul 2025) | 2.06% (Mar 2025) | 11.04 L | 0.00 |
| Vishal Mega Mart Ltd. | Diversified retail | 16040.3 | 2.66% | -0.17% | 2.94% (Jul 2025) | 0% (Nov 2024) | 11.09 Cr | 0.00 |
| Ipca Laboratories Ltd. | Pharmaceuticals | 15260.8 | 2.53% | -0.23% | 3.45% (Dec 2024) | 2.53% (Oct 2025) | 1.20 Cr | 0.00 |
| J.K. Cement Ltd. | Cement & cement products | 15077.6 | 2.50% | -0.12% | 2.96% (Aug 2025) | 2.11% (Nov 2024) | 24.26 L | 0.00 |
| Indian Bank | Public sector bank | 14588 | 2.42% | 0.23% | 2.42% (Oct 2025) | 0% (Nov 2024) | 1.70 Cr | 0.00 |
| Bharat Electronics Ltd. | Aerospace & defense | 14311.7 | 2.37% | 0.04% | 2.48% (Jun 2025) | 1.8% (Dec 2024) | 3.36 Cr | 0.00 |
| Oberoi Realty Ltd. | Residential, commercial projects | 14245.9 | 2.36% | 0.19% | 3.49% (Dec 2024) | 2.17% (Sep 2025) | 80.11 L | 0.00 |
Ideal Investors:
- Long-term investors (5–10 years or more) who want to benefit from mid-cap growth.
- Those who are comfortable with moderate to high risk.
- Investors who want a satellite equity allocation — i.e., not putting all money in mid-cap funds, but using this as a growth engine in a diversified portfolio.
- SIP investors — Regular monthly investments here can help smoothen volatility over time.
Not So Ideal For:
- Very risk-averse investors who cannot tolerate drawdowns.
- Short-term investors (under 3 years) unless they are okay with market fluctuations.
- Investors looking for stable dividend income — this is a growth fund.
7. What Has Helped Kotak Midcap Fund Do Well in Recent Times
- Consistency + Conviction: Rather than being overactive, the fund seems to favor a buy-and-hold approach, which helps in capturing long-term structural growth.
- Smart Cash Deployment: Value Research points out that the manager used cash reserves wisely instead of sitting out when others panicked.
- Recovery from Underperformance: A turnaround in the last year has moved it from lower performance quartiles to competing strongly.
- Balanced Portfolio Construction: By picking quality mid-cap businesses and balancing between cyclical and defensive plays, the fund tries to manage risk and reward. Financial Express also praises this risk-reward balance.
8. Real-Life Investor Perspective
- Many investors are using Kotak Midcap as a long-term wealth creation vehicle.
- From Reddit communities: “Kotak is more predictable and stable … helps in sticking with SIPs during tough times.”
- Another investor mentioned Kotak Midcap in their mid-cap allocation for a 20+ year plan: “I have been trying to research on selecting a mid cap fund … Left with kotak … Time horizon: 20+ years … SIP of ₹5,000/month”
- These real investor views reflect how Kotak Midcap is seen by many as a reliable long-term mid-cap choice, not just a high-risk bet.
9. How to Invest in Kotak Midcap Fund
- Plans / Options: Kotak offers both Direct and Regular plans. For long-term investors, direct growth plan is often better due to lower expense ratio.
- SIP: Ideal for rupee-cost averaging. You can start with a relatively small monthly amount (Kotak’s minimums are quite affordable).
- Lump Sum: If you’re confident in the mid-cap opportunity and have a long-term view, a lump-sum investment can also work well.
- Holding Period: Best if held for 5+ years, preferably 7–10 years, to ride out mid-cap volatility.
10. Pros & Key Advantages
- Strong Long-Term Performance: The fund has demonstrated attractive returns over the years.
- Large but Flexible AUM: With a large AUM, it has stability, but still invests dynamically.
- Low Direct Expense Ratio: Direct plan’s 0.37% is very competitive
- Experienced Management: Under Atul Bhole, the fund has shown good strategic decisions recently.
- Balanced Volatility: Risk metrics like standard deviation and beta are decent for a mid-cap fund.
- Well-Diversified Portfolio: The top holdings show a mix across industries, reducing concentration risk.
11. Downsides & What to Watch Out For
- Volatility: Mid-cap funds are inherently riskier; you will likely experience ups and downs.
- Liquidity Constraints: Exit pressure or liquidity risk in some mid-cap stocks could be a concern.
- Market Timing Risk: If you enter just before a downturn, short-term losses can be steep.
- Expense Ratio (Regular): At 1.38%, the regular plan is relatively expensive compared to some other funds / index funds.
- Exit Load: 1% if redeemed within 1 year. Kotak
- Future Alpha Risk: As AUM grows, the ability to generate very high returns could be challenged.
12. Comparison with Peers & Benchmark
- Benchmark: Kotak’s scheme uses Nifty Midcap 150 TRI as one of its key benchmarks.
- Peer Performance: In recent times, some mid-cap funds have outperformed, but Kotak’s strength is its risk-reward balance and consistent approach.
- Value Research Insight: According to Value Research, Kotak Midcap has made smart sector exits and avoided over-betting in expensive names, which helped in its recent bounce-back.
- Risk-Adjusted Efficiency: As Financial Express notes, Kotak’s standard deviation is relatively controlled for a mid-cap fund, and the fund has rewarded investors adequately for the risk taken.
13. Risk Management & How the Fund Mitigates Downside
- Cash Management: The fund seems to use cash strategically rather than holding too much uninvested.
- Bottom-Up Stock Selection: By focusing on quality mid-cap businesses, it tries to pick companies with sustainable growth.
- Diversification: Across sectors (top holdings include healthcare, financials, manufacturing, technology), reducing the risk of being overly exposed to one sector.
- Long-Term View: The fund’s buy-and-hold style helps mitigate short-term market noise. Financial Express praises this discipline.
14. Is Kotak Midcap Fund for You? My Verdict
When to Consider Investing:
- You’re building a growth-oriented portfolio and want to include mid-cap exposure.
- You have a medium to long-term timeframe (ideally 5+ years).
- You are okay with fairly high volatility in exchange for potential high returns.
- You prefer active fund management (rather than just tracking an index) and believe in the capacity of skilled fund managers to pick growth mid-cap companies.
- You want to invest via SIP to average out costs over time.
Maybe Skip or Limit If:
- Your risk appetite is very low and you don’t want big swings in NAV.
- You are investing for a very short-term goal (< 3 years).
- Cost is a primary concern and you would rather invest in low-cost index funds / ETFs.
MORE FUNDS FROM KOTAK MAHINDRA MUTUAL FUND
SCHEMES MANAGED
| Scheme Name | Crisil Rating | Category | Risk | 3Y Return (%) | AUM (Cr) (₹) |
|---|---|---|---|---|---|
| Kotak Arbitrage Fund – Direct Plan – Growth | 3 | Arbitrage Fund | Low Risk | 7.92 | 72,279.21 |
| Kotak Arbitrage Fund – Growth | 3 | Arbitrage Fund | Low Risk | 7.28 | 72,279.21 |
| Kotak Midcap Fund – Direct Plan – Growth | 4 | Mid Cap Fund | Very High Risk | 23.50 | 60,385.03 |
| Kotak Midcap Fund – Growth | 4 | Mid Cap Fund | Very High Risk | 22.16 | 60,385.03 |
| Kotak Flexi Cap Fund – Direct Plan – Growth | 3 | Flexi Cap Fund | Very High Risk | 17.96 | 56,039.86 |
| Kotak Flexi Cap Fund – Growth | 4 | Flexi Cap Fund | Very High Risk | 16.95 | 56,039.86 |
| Kotak Money Market Fund – Growth | 4 | Money Market Fund | Low to Moderate Risk | 7.51 | 35,100.22 |
| Kotak Money Market Fund – Direct Plan – Growth | 3 | Money Market Fund | Low to Moderate Risk | 7.63 | 35,100.22 |
| Kotak Liquid Fund – Direct Plan – Growth | 2 | Liquid Fund | Moderate Risk | 7.07 | 34,080.38 |
| Kotak Liquid Fund – Regular Plan – Growth | 2 | Liquid Fund | Moderate Risk | 6.94 | 34,080.38 |
| Kotak Large & Midcap Fund – Growth | 3 | Large & Mid Cap Fund | Very High Risk | 19.34 | 29,515.91 |
| Kotak Large & Midcap Fund – Direct Plan – Growth | 3 | Large & Mid Cap Fund | Very High Risk | 20.67 | 29,515.91 |
| Kotak Multicap Fund – Regular Plan – Growth | 4 | Multi Cap Fund | Very High Risk | 23.64 | 21,541.46 |
| Kotak Multicap Fund – Direct Plan – Growth | 4 | Multi Cap Fund | Very High Risk | 25.32 | 21,541.46 |
| Kotak Corporate Bond Fund – Growth | 3 | Corporate Bond Fund | Low to Moderate Risk | 7.74 | 18,909.15 |
15. Final Thoughts
Kotak Midcap Fund is a very competent and mature mid-cap fund. It combines scale, experience, and a sensible investment philosophy. Its recent turnaround and disciplined approach make it appealing for investors who want long-term mid-cap exposure without gambling wildly Mid-cap investing is not for the faint-hearted, but if you believe in India’s growth story and are ready to stay invested, this fund can be a meaningful part of your equity portfolio
Disclaimer
The information provided in this blog is for educational and informational purposes only. Mutual fund investments are subject to market risks, including the possible loss of capital. Past performance is not an indicator of future results. The data, analysis, and opinions shared here are based on publicly available information and personal interpretation and should not be considered financial advice.
Readers are advised to consult a SEBI-registered financial advisor before making any investment decisions. The author and this website are not responsible for any financial loss, decision, or outcome based on the information provided in this article
