Don’t Give Up on These 3 Mid-Cap Funds

US equities notched another strong year in 2025, but market capitalization mattered. Mid-cap stocks struggled to keep pace with both their large- and small-cap peers. The Morningstar US Mid Cap Index’s 10.1% return for the year trailed the Morningstar US Large Cap and Morningstar US Small Cap indexes’ 19.8% and 12.2% gains, respectively. While some funds have been able to distinguish themselves, others have been challenged. Let’s look at three well-regarded mid-cap blend funds that have struggled.

Boston Trust Walden SMID Cap WASMX eked out a 0.3% gain in 2025, worse than 93% of its mid-cap blend Morningstar Category peers and well off the Morningstar US Mid Cap Index’s 10.1% return. The fund’s risk-conscious, team-based approach still stands out in the category, though.

Longtime lead manager Kenneth Scott stepped off the strategy at the end of 2025 but passed leadership to comanager Richard Williams in mid-2024. Williams’ two comanagers alleviate key-person risk. The team’s focus on quality and valuation lets stock selection drive returns. The fund, which has a Morningstar Medalist Rating of Silver, keeps position sizes below 2.5% and sector deviations within 5 percentage points of the Russell 2500 Index. The team’s emphasis on durable companies has been a headwind when riskier, lower-quality stocks have been in vogue. Still, the fund has been less volatile than many peers over time, which has bolstered its risk-adjusted results; its Sharpe ratio eclipsed 59% of peers over the past decade.

Last year was challenging for Bronze-rated Davenport Equity Opportunities DEOPX, especially after the US tariff announcements in early April. Its 2.6% retreat in 2025 trailed 97% of rivals and the benchmark by 12.7 percentage points. Still, this fund remains compelling.

George Smith and Chris Pearson have comanaged the fund together since 2013, with Smith listed since its inception at the end of 2010. The experienced duo oversees a research-intensive approach, digging deep into company fundamentals to identify those with strong management teams, competitive business models, and compelling valuations. It culminates in a high-conviction portfolio of 20–40 stocks (29 as of December 2025) that the managers intend to hold for the long term. They typically lean more toward companies with above-average earnings growth, contributing to a slight growth tilt that has nudged the fund into the mid-cap growth area of the Morningstar Style Box at times. Long-term performance has been more attractive. An 11.2% return since Jan. 1, 2011, fell in the category’s top quartile but underperformed the benchmark’s 12.0%.

Bronze-rated JPMorgan SMID Cap Equity PECAX dropped 3.0% in 2025 compared with the 9.1% and 10.1% gains for the average peer and benchmark, respectively, making it a year to forget. Stock-picking within industrials and consumer discretionary was the primary detractor from returns over the past two years. This difficult period has also weighed on long-term performance. Since the separate account’s 2016 inception through February 2026, its 7.0% return fell in the category’s worst decile and lagged the benchmark by 5.1 percentage points.

We still believe in this fund’s skilled team and disciplined approach, though, despite its recent results. Comanagers Don San Jose and Dan Percella lead a compact team of four analysts. They took the reins of the mutual fund in 2020 after leading the separate account version of this strategy since 2016, but they have worked together on other strategies since 2008. The team seeks profitable businesses with attractive valuations and proven management teams. It also looks for stocks that can expand their margins over time, believing they will boost earnings, cash flow, and eventually their share prices.

This article first appeared in the February 2026 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor by visiting this website.