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Fund Pick: L&T Midcap Fund - Consistently ahead of the pack

The fund aims to generate capital appreciation by investing primarily in midcap stocks

Business Standard 

Larsen & Toubro, L&T
Larsen & Toubro

Launched in August 2004, is classified under the small and mid-cap equity schemes of Mutual Fund Ranking. It has featured in the top 30 percentile (Fund Rank 1 or 2) in the five consecutive quarters ended June 2017. The fund's quarterly average under management (AUM) tallied at Rs 9,014 crore in June 2017 under the guidance of S N Lahiri. 

The fund aims to generate capital appreciation by investing primarily in The scheme will invest primarily in whose falls between the highest and the lowest constituent of the Midcap 100. 


Superior stock-selection has enabled the fund to consistently outperform the benchmark (Free Float Midcap 100) and its category (funds ranked under the small and mid-cap equity schemes in June 2017 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 and domestic reforms-driven rally with a significant margin over the benchmark and its peers. 

An of Rs 1,000 in the fund on August 9, 2004 (inception of the fund) would have grown to Rs 13,043 on August 22, 2017 at an annualised rate of 21.76 per cent, surpassing the benchmark which would have grown to Rs 8,335 (17.65 per cent). 

A systematic plan (SIP) is a disciplined approach to investing which has been the prescribed mode for retail investors.

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 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 non-durables (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 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 from its overall universe of 169 stocks, which suggests the fund manager deploys proactive management.

Nine out of these 10 outperformed the fund's benchmark over their respective holding periods, demonstrating a successful stock-picking strategy.

Top contributors among the consistently held include Hindustan Petroleum Corporation, Aarti Industries, The Ramco Cements, Future Lifestyle Fashions and Shree Cement. 


First Published: Thu, August 24 2017. 00:59 IST