Fund pick: Invesco India Mid Cap is a consistent mid-cap outperformer

Invesco India Mid Cap Fund was launched in April 2007. It has featured in the top 30 percentile of the mid-cap category of the CRISIL Mutual Fund Ranking (CMFR) for the past three quarters ended June 2020. The fund has been managed by Pranav Gokhale and Neelesh Dhamnaskar since March 2018 and July 2018, respectively. The month-end assets under management (AUM) of the fund increased over five times between August 2017 and July 2020, from Rs 173 crore to Rs 875 crore.

The investment objective of the scheme is to generate capital appreciation by investing predominantly in mid-cap companies.

Trailing returns

The fund has consistently outperformed the benchmark (Nifty Midcap 100 TRI) and its peers (funds ranked under the mid-cap fund category in the June 2020 CMFR) in all the trailing periods under analysis.

An investment of Rs 10,000 in the fund on April 19, 2007 (inception of the fund) would have grown to Rs 50,690 on August 12, 2020, at an annualised rate of 12.95 per cent, as compared with the category and benchmark which would have grown to Rs 40,428 (11.05 per cent per annum) and Rs 37,657 (10.46 per cent per annum), respectively.

A systematic investment plan (SIP) is a disciplined mode of investment offered by mutual funds, through which one can invest a certain amount at regular intervals. A monthly investment of Rs 10,000 over the past 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 24.47 lakh (13.78 per cent annualised returns) as compared with Rs 18.82 lakh (8.79 per cent annualised returns) in the benchmark as on August 12, 2020.

Portfolio analysis

Over the past three years, the fund has maintained a predominant allocation to mid-cap stocks with an average 61.52 per cent exposure. Small- and large-cap exposure averaged 22.51 per cent and 12.10 per cent, respectively, during this period. The fund increased mid-cap exposure after March 2018 to align the portfolio with Sebi’s (Securities and Exchange Board of India’s) definition for mid-cap funds. 

The portfolio was diversified across 55 sectors in the past three years. Banks had the highest average allocation of 8.39 per cent, followed by pharmaceuticals (8.16 per cent), finance (5.94 per cent), gas (4.52 per cent), and retailing (4.19 per cent).

The fund took exposure to 104 stocks in the past three years. Coromandel International, VIP Industries, Dixon Technologies, IRCTC, and Apollo Hospitals Enterprises have been the major contributors to the fund’s performance during this period. The fund held five stocks consistently during the period under analysis, of which Vinati Organics and AIA Engineering have been the biggest contributors to the fund’s performance