With the stock market turning increasingly volatile in the recent past, many top market experts including ace investor Rakesh Jhunjhunwala have suggested that retail investors invest through the mutual fund route. But where should the investors look to invest? Smallcap czar Porinju Veliyath believes that the small and midcap stocks space offer attractive opportunities for the investors, especially after the recent correction. “Since the end of December, we were feeling some kind of discomfort at valuations, at the speed at which stocks had been going up, especially midcaps and smallcaps,” Porinju Veliyath told in a recent interview to ET Now adding that the valuation discomfort seems to have receded now. In a recent interview to FE Online, Alok Singh of BOI AXA mutual fund said that the midcap space is likely to outperform the large cap space in the long-run. We take a look at two 5 star rated midcap funds from Morningstar.
HDFC Midcap Opportunities Fund
A 5-star rated fund, Morningstar says that HDFC Mid-Cap Opportunities makes the grade on all counts. As on 31st Jan 2018, the fund had an AUM of Rs 20,278 crore. Notably, the fund has beaten its benchmark 1-year, 3-year, 5-year and 10 year period. The fund has an expense ratio of 2.26%. Among the largest shares in the portfolio of the fund are shares of Voltas, Balkrishna Industries, Sundaram Fasteners and Hexaware technologies. The fund has returned more than 18% in the last one-year period. According to the company’s website the investment objective of the fund is to generate long-term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities of Small and Mid-Cap companies.
Mirae Asset Emerging Bluechip
Another 5-star rated fund, Mirae Asset Emerging Bluechip had an AUM of Rs 5,302 crore as on 31st January 2018. According to the company’s website Mirae Asset Emerging Bluechip Fund seeks to participate in the growth story of today’s relatively medium sized but emerging companies which have the potential to be well-established tomorrow. The fund has an expense ratio of 2.46%. Major shares in the portfolio include shares of Tata Global Beverages, ICICI Bank. Kotak Mahindra Bank and Raymond with investments of more than 3% on AUM in each of these stocks.