Its investment objective is to generate capital appreciation by investing primarily in mid-cap stocks
Launched in August 2004, L&T Midcap Fund invests primarily in companies with market capitalisation between the highest and the lowest constituent of the Nifty Midcap 100 index. The fund was a part of DBS Cholamandalam Asset Management Company before it was acquired by L&T Investment Management in February 2010. It ranked 1 in the mid-cap category of CRISIL Mutual Fund Rankings (CMFR) - June 2018. S N Lahiri has been managing the fund since June 2013. He was joined by Vihang Naik in June 2016.
The fund's month-end assets under management (AUM) increased over eight times from Rs 366 crore in October 2015 to Rs 3,095 crore in September 2018. Its investment objective is to generate capital appreciation by investing primarily in mid-cap stocks.
Trailing returns
The fund has outperformed the benchmark (Nifty Mid Cap 100 TRI) and its peers (funds ranked under the mid cap category in CMFR - June 2018) across all trailing periods under analysis except the one-year trail.
An investment of Rs 10,000 in the fund on August 09, 2004 (inception date of the fund) would have grown to Rs 1,29,000 (19.74% CAGR) as on October 16, 2018 vis-à-vis the benchmark's Rs 98,705 (17.5% CAGR) and the category's Rs 1,22,647 (19.32% CAGR).
SIP returns
A monthly investment of Rs 10,000 via a systematic investment plan (SIP) for 10 years would have grown to Rs 33.13 lakh (XIRR 19.42%). A similar investment in the benchmark would have grown to Rs 25.25 lakh (XIRR 14.34%).
Risk-reward matrix
The fund delivered higher average daily returns over the past three years relative to peers coupled with relatively lower volatility.
Portfolio analysis
During the past three years, the fund invested in 173 stocks - chiefly in mid-cap and small-cap stocks, with residual allotment to large caps. After the reclassification of mutual fund schemes by Sebi, the fund has gradually moved towards holding more mid-cap stocks in its portfolio. The top five sectors constituted 45.07% of the fund's equity portfolio in September 2018.
In the past three years, the consumer non-durables sector had the highest average allocation of 11.09% followed by the finance (8.60%) and banking (7.76%) sectors. Avanti Feeds and Triveni Engineering & Industries have been the key contributors from the consumer non-durables sector during the period under analysis.
Out of the 173 stocks the fund invested in during the three years, it consistently held 15. Among the consistently held stocks Future Lifestyle Fashions, The Ramco Cements, Aarti Industries, KPR Mill and Indian Hume Pipe were the biggest contributors to the fund's performance. Other key contributors include Graphite India, Berger Paints India and KEI Industries.
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