Top 5 Mid Cap funds for 2018 in India
Midcap schemes invest in mid-sized companies that have the potential to become large companies or leaders in their own field. However, their journey to greatness is not a smooth ride. Any negative news or development may have huge impact on their stock prices. But, if they realise their potential, they may reward investors handsomely. This is the basic premise of investing in midcap schemes.
Simply put, they are risky and can be extremely volatile. But they also have the potential to offer extra returns to compensate for the higher risk you are taking. For example, some midcap schemes offered around 31.78 per cent and 16.71 per cent returns in the five- and 10-year periods respectively. Ideally, you should invest in a midcap scheme only if you have an investment horizon of at least 5 to 10 years. Don’t panic when things go bad, stay invested and you will get impressive returns at the end of your investment horizon.
To make your investment easy, we at Upwardly have handpicked five Midcap schemes for you.
1. Mirae Asset Emerging Bluechip Fund
This fund lives up to the ‘blue-chip’ tag in its name by scouting for quality names in the mid-cap space. It has outpaced both its benchmark and peers every year since its launch in 2011. The fund’s returns have stayed ahead of both benchmark and category returns on a one, three and five-year CAGR, unusual for the category. On three and five-year returns, it has outperformed its benchmark by 6 to 10 percentage points and the category by 6 to 7 percentage points. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹7 lakhs now.
2. L&T Midcap Fund
This fund’s strategy is a blend of growth and value styles of investing. The focus is on owning fundamentally strong and scalable businesses with good management track record, at reasonable valuations. The fund’s asset allocation reveals a 25–30 per cent allocation to small-cap stocks, about 10–11 percentage points lower than the small-cap category, while mid-cap allocation is about 55 per cent, with the rest parked in large caps. This may result in a lower risk profile, while also moderating the returns from this fund. With 3-year and 5-year annualized returns of 17.74% and 28.22% respectively, the fund has outperformed its benchmark by 4 to 9 percentage points and peers by 4 to 5 percentage points. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹6.6 lakhs now.
3. Aditya Birla Sun Life Pure Value Fund
Its portfolio is made up of any company across the sectors with market value that is deemed to be less than its intrinsic value. The fund’s track record shows that it has beaten its benchmark in every one of those years. Trailing returns show large margins of outperformance, both of its benchmark and category, with three- and five-year returns 11–15 per cent ahead of the benchmark and 5–6 percentage points more than category. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹6.8 lakhs now.
4. Canara Robeco Emerging Equities Fund
Consistency over time, rather than an ability to trounce the category, has been the hallmark of this fund. Its attempt is to identify companies which have the potential to become leaders of tomorrow in their respective sectors. It uses a growth-at-a-reasonable-price approach to pick companies which show consistent earnings growth higher than that of the market. On a three and five-year basis, it has outperformed its benchmark by 3 to 9 percentage points and category by 3 to 5 percentage points. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹6.8 lakhs now.
5. HDFC Mid-Cap Opportunities Fund
This fund is a remarkably consistent performer in this category. The fund’s three-year return, at 14.95 per cent, is one percentage point ahead of the benchmark and 2 percentage points ahead its category returns. The five-year returns, at 25.40 per cent, are 6 percentage points higher than the benchmark returns and beat its peers’ returns by about 2 percentage points. What stands out in its annual returns is its ability to weather any kind of bear market. In 2008, 2011 and 2013, this was a rare mid-cap fund to contain losses to levels far lower than those of its benchmark. The popularity has resulted in a rapid growth of the fund’s size, from under Rs 10,000 crore in early 2016 to over Rs 20,000 crore now. This makes it by far the largest fund in this category. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹6.1 lakhs now.
Start your SIP in the best mutual funds at www.Upwardly.in. Happy Investing!!
Originally published at www.upwardly.in on February 22, 2018.
