3 Top-Performing Mid-Cap Value Funds

Mid-cap value stocks can be an opportunity to find names overlooked by the market, but the group can come with added risk. Morningstar analysts think these funds are among the best options for investors looking at this area. To screen for the top-performing funds in this category, we looked for those with the best returns over the last one-, three-, and five-year periods. All names that passed the screen were actively managed.

• Harbor Mid Cap Value Fund HNMVX
• Hotchkis & Wiley Value Opportunities Fund HWAZX
• WisdomTree US Value Fund WTV

Mid-Cap Value Funds Performance

Over the last 12 months, the mid-cap value category returned 4.06%. On an annualized rate, these funds have returned 13.78% over the last three years and 13.26% over the last five. The category’s recent returns lag the broader stock market as measured by the Morningstar US Market Index, which has risen 16.10% over the last 12 months. The index is up 23.88% annualized over the last three years and 15.28% per year over the past five.

What Are Mid-Cap Value Funds?

Some mid-cap value portfolios focus on medium-size companies, while others land here because they own a mix of small-, mid-, and large-cap stocks. All look for US stocks that are less expensive or growing more slowly than the market. The US mid-cap range for market capitalization typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the US equity market. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow).

Screening for the Top-Performing Mid-Cap Value Funds

To find the best mid-cap value funds, we looked at returns data from the past one, three, and five years using Morningstar Direct. We screened for open-ended and exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for those periods. We also filtered for funds with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded funds with assets under $100 million and analyst coverage that was not 100%. This left three investments.

Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors outside of retirement plans, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. In addition, Medalist Ratings may differ among the share classes of a fund.

3 Top-Performing Mid-Cap Value Funds

Harbor Mid Cap Value Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

Over the past 12 months, the $364.2 million Harbor Mid Cap Value Fund rose 6.18%, while the average fund in its category rose 4.06%. The fund, launched in March 2016, has climbed 16.26% over the past three years and 15.47% over the past five.

“This strategy requires patience on the part of investors. The six co-managers of this strategy are deep-value investors to their core. Their basic view is that the market mistakenly projects current growth rates for companies indefinitely into the future. This results in overexuberance for high-growth stocks and undue pessimism toward slower-growth stocks. So the management team targets the latter group and wants to own companies that are selling at a discount to peers and their own histories. The managers don’t simply buy cheap companies, though, as some of them are beaten down for good reason. Instead, they look for those whose stock prices are depressed over the long-term but have shown recent upticks in financial and stock performance.

“This strategy experiences periods of deep underperformance and sharp outperformance, and investors need to stay in to reap the through-cycle benefits. For instance, between July 2015 and July 2016, the institutional shares trailed the Russell Midcap Value Index by more than 8 percentage points. However, between March 2021 and February 2021, it outperformed the same index by a whopping 17 percentage points. This strategy has lagged the benchmark over Lakonishok’s tenure, but LSV’s impressive record on both small- and large-cap strategies should give investors confidence in holding this portfolio.”

—Jack Shannon, principal

Hotchkis & Wiley Value Opportunities Fund

• Morningstar Medalist Rating: Bronze
• Morningstar Rating: ★★★★★

The $787.9 million fund has climbed 12.26% over the past 12 months, outperforming the average fund in its category, which rose 4.06%. The Hotchkis and Wiley fund, launched in September 2019, has climbed 19.44% over the past three years and 19.76% over the past five.

“This contrarian offering uses an approach that is in step with the firm’s equity-only strategies, but it has a broader opportunity set. While it shares the firm’s focus on buying companies undergoing difficulties that can return to normal earnings, it has the flexibility to invest across the capital structure and market-cap spectrum, with valuations driving decisions. It has primarily owned equities in recent years but invested as much as 12% of assets in bonds in the past. It may also selectively invest in non-US stocks, special situations such as risk arbitrage trades, and buy stakes in private firms.

“The 40-to-70-stock portfolio is consistent with the firm’s deep-value identity, and the team often leans into unloved sectors, industries, or companies. But true to its name, Green can opportunistically allocate to nontraditional value sectors when the moment presents. For instance, he scooped up additional shares in Microsoft during 2022’s selloff. It’s this adept execution that’s underpinned the strategy’s success.

“Investors who can weather the volatility have been handsomely rewarded over the long haul, but it’s been an up-and-down ride at times. While this strategy is often more volatile than relevant peers and not a great down-market performer, it has made up for this in market rallies to offset the excess risk. Through February 2025, since the mutual fund’s year-end 2002 inception, as well as over the trailing 10 years, its risk-adjusted returns have outpaced those of its prospectus Russell 3000 Value Index benchmark.”

—Chris Tate, senior analyst

WisdomTree US Value Fund

• Morningstar Medalist Rating: Bronze
• Morningstar Rating: ★★★★★

The $1.9 billion fund has climbed 12.14% over the past 12 months, outperforming the average fund in its category, which rose 4.06%. The WisdomTree fund, launched in February 2007, has climbed 21.85% over the past three years and 17.98% over the past five.

“The fund is actively managed but uses quantitative rules to fill its portfolio. It screens the largest 800 US stocks for those returning the most money to shareholders, either through dividend payments or buybacks. A stock’s combined dividend and net buyback yield is its shareholder yield, or total yield. Some competitors include debt reduction in their shareholder yield calculation, but that’s a less direct way to benefit shareholders.

“A shareholder yield strategy has merit, but careful implementation is key to controlling risk. On the one hand, dividend-focused portfolios tend to concentrate on steady-value names whose earnings stability can provide a long-term advantage. On the other hand, buyback-focused portfolios back into quality stocks but experience high turnover owing to the opportunistic buyback market. This fund still experiences high turnover, but WisdomTree’s composite risk score shifts focus away from the riskiest high yielders.

“The risk score considers several quality and momentum characteristics, and the portfolio excludes firms with high shareholder yields and poor composite risk scores. Managers also have some discretion to tweak position weights up or down to control differences between the portfolio, the Russell Midcap Value Index, and the Russell 1000 Value Index. These steps prevent the fund from concentrating in risky names but still allow it to maximize exposure to the total yield factor.

“The total yield factor has enjoyed a meaningful premium in recent years, according to the Morningstar Risk Model, helping fund performance since the fund switched to its current process in December 2017. Since then, through June 2025, it outpaced the Russell Midcap Value category index by 4.7 percentage points annualized with comparable volatility. It also captured just 90% of that index’s downside, underscoring the positive effect of its composite risk score.”

—Zachary Evens, analyst