L&T Midcap Fund: Mutual fund review

For many investors, putting money in a scheme focused largely on midcaps would be a bold call in the present market conditions. But then not all mid-cap schemes buy momentum stocks which do well in the short term and fail miserably in the long term. There are some midcap funds that carefully construct a portfolio of stocks, delivering returns as good as large-cap schemes. One such scheme is L & T Midcap scheme. The scheme’s fund manager, Soumendra Nath Lahiri, has constructed a portfolio of second-best companies in their sectors especially from the universe of mid-sized companies. This works as good as a large-cap schemes. A key reason being the focus is on picking the next best thing in a sector once the stipulated limit of large-sized companies is crossed. Due to this, the scheme is a consistent performer despite being in a highly volatile category of mid-sized companies. In the past five- and 10-year periods, the scheme has delivered 23% and 24% returns, while its benchmark index, Nifty Midcap 100 TRI, has given 18% and 20% returns in the same period, respectively.

Portfolio change (past 6 months)

Returns (in %)

Returns peer comparison (in %)
Source: Accord Fintech; Compiled by ETIG Database

Expert Take
RUPESH BHANSALI,
Head, Mutual Funds, GEPL Capital
Soumendra Nath Lahiri is known for his stock-picking ability for more than two decades. Unlike some mid-cap schemes, which have large-caps in top five investments, L & T Midcap is quite clear about its universe. It is a pure midcap scheme. The scheme’s portfolio is constructed in such a way that it protects the downside with exposure to defensive such as pharmaceuticals (10%) and as economy improves the scheme would gain from its exposure to industrials (15%) and banking and financial services (15%).