As stock markets continue their rollercoaster ride in 2025, many investors are asking: “Should I invest in Nifty Next 50 funds or Midcap mutual funds?”
Both categories offer strong growth potential, but they differ in risk, return, and volatility.
Let’s explore which one fits your investment strategy this year.
What Are Nifty Next 50 and Midcap Funds 2025?
Nifty Next 50 Funds
These are index or actively managed funds that invest in companies ranked 51 to 100 by market capitalization on the NSE. Think of them as the “waiting list” for the prestigious Nifty 50.
- Companies like Hindustan Aeronautics, Trent, and DLF have been part of this list.
- They are large, well-known businesses but not yet market giants.
- Less volatile than midcaps but more aggressive than Nifty 50 funds.
Midcap Funds
Midcap mutual funds invest in companies ranked 101 to 250 by market capitalization.
- These companies are often in their growth phase.
- Includes leaders in niche sectors like manufacturing, healthcare, and chemicals.
- More volatile, but offer higher long-term returns.
Nifty Next 50 vs. Midcap: Performance Snapshot (as of 2025)
| Fund Type | 3-Year CAGR | 5-Year CAGR | Volatility |
|---|---|---|---|
| Nifty Next 50 | ~18% | ~15% | Moderate |
| Midcap Funds | ~22% | ~17% | High |
Note: Exact returns vary by fund. These are average category performances.
Risk-Return Comparison
| Feature | Nifty Next 50 | Midcap Funds |
|---|---|---|
| Market Cap | Large | Mid |
| Risk Level | Moderate | High |
| Return Potential | High | Very High |
| Suitable For | 5+ year SIP investors | Aggressive, long-term investors |
| Ideal Investment | SIP or lumpsum during correction | SIP only due to volatility |
2025 Market Trends: What’s Shaping This Decision?
- Government capex boom is fueling growth in mid-sized infra and capital goods companies.
- Domestic mutual fund inflows are rising, especially in mid and small-cap segments.
- Nifty Next 50’s top stocks are heavily weighted in PSU, infra, and financial sectors—creating concentration risk.
- Analysts expect rotation from large-cap to midcaps to continue through 2025.
Who Should Choose What?
Choose Nifty Next 50 if:
- You prefer moderate risk and want exposure to companies just below the Nifty 50.
- You’re planning SIPs for 5–7 years or more.
- You want to balance growth with relative stability.
Choose Midcap Funds if:
- You have a high risk tolerance and a long horizon (7–10+ years).
- You are investing through SIPs and can stomach short-term volatility.
- You want to ride India’s growth story through emerging leaders.
Suggested Investment Strategy
- Don’t choose one over the other. Consider a blended approach:
- 60% Nifty Next 50
- 40% Midcap Funds
(Adjust based on risk profile and time horizon.)
- Use Systematic Investment Plans (SIPs) to average costs and manage volatility.
- Rebalance yearly to maintain your asset allocation.
Final Thoughts
In 2025, both Nifty Next 50 and Midcap Funds offer attractive opportunities.
There’s no universal answer—your risk appetite, investment horizon, and financial goals should guide your choice.
If you’re unsure, consult a SEBI-registered investment advisor or start small and build confidence over time.
CTA (Call to Action)
- Compare top-performing funds in both categories on our Mutual Fund Screener.
- Use our free SIP Calculator to see how much to invest monthly for your goals.
- Got a question? Drop a comment or reach out for a personalized fund strategy.
📢 Disclaimer: “Money Advisor is operated by a SEBI-registered Mutual Fund Distributor (ARN-129675). The content on this blog is for informational purposes only and should not be considered as investment advice. Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully.”
