Consistently ahead of the pack
L& T MIDCAP FUND
Launched in August 2004, L& T Midcap Fund is classified under the small and mid- cap equity schemes of CRISIL Mutual Fund Ranking. It has featured in the top 30 percentile ( CRISIL Fund Rank 1 or 2) in the five consecutive quarters ended June 2017. The fund's quarterly average assets under management ( AUM) tallied at ~ 9,014 crore in June 2017 under the guidance of S N Lahiri.
The fund aims to generate capital appreciation by investing primarily in midcap stocks. The scheme will invest primarily in companies whose market capitalisation falls between the highest and the lowest constituent of the Nifty Midcap 100.
Performance
Superior stock- selection has enabled the fund to consistently outperform the benchmark ( Nifty Free Float Midcap 100) and its category ( funds ranked under the small and mid- cap equity schemes in June 2017 CRISIL Mutual Fund Ranking). Especially during the last year, when markets were on the rise, the fund has delivered superlative returns.
The fund's performance when compared across market cycles indicates its propensity to outperform during bull phases. This trend has continued in the recent global liquidity and domestic reforms- driven rally with a significant margin over the benchmark and its peers.
An investment of ~ 1,000 in the fund on August 9, 2004 ( inception of the fund) would have grown to ~ 13,043 on August 22, 2017 at an annualised rate of 21.76 per cent, surpassing the benchmark which would have grown to ~ 8,335 ( 17.65 per cent).
A systematic investment plan ( SIP) is a disciplined approach to investing which has been the prescribed mode for retail investors. L& T Midcap Fund has outpaced its benchmark in this aspect as well, reaping exceptional returns compared with the benchmark across all timeframes.
Portfolio analysis
As of June 2017, the fund's portfolio is spread across 24 sectors and 69 stocks, compared with the average of 22 sectors and 59 stocks in the peer portfolios. Thus, the fund displays a greater degree of diversification and thereby better risk management.
As on June 2017, the top five sectors constituted 40.51 per cent of the portfolio, with highest exposure to consumer nondurables ( 9.23 per cent), followed by finance ( 8.50 per cent), banks ( 8.25 per cent), construction ( 7.30 per cent) and industrial products ( 7.23 per cent). In the last one year, some of the top performing stocks from these sectors were Federal Bank, Avanti Feeds, KEI Industries and Bajaj Finserv, which have surpassed benchmark returns during the corresponding period.
In the past three years, the fund has consistently held 10 stocks from its overall investment universe of 169 stocks, which suggests the fund manager deploys proactive management. Nine out of these 10 stocks outperformed the fund's benchmark over their respective holding periods, demonstrating a successful stock- picking strategy. Top contributors among the consistently held stocks include Hindustan Petroleum Corporation, Aarti Industries, The Ramco Cements, Future Lifestyle Fashions and Shree Cement.