Best Midcap Equity Funds: Some MF’s offer upto 12% returns

By: | Updated: May 29, 2017 6:35 PM

Over the last one year, several mid-cap funds have continued to deliver positive returns even as the broader equity markets remained volatile. With the S&P BSE Midcap index at all-time high, fund managers believe that going forward returns will purely depend on selection of stocks.

Over the last one year, several mid-cap funds have continued to deliver positive returns even as the broader equity markets remained volatile. With the S&P BSE Midcap index at all-time high, fund managers believe that going forward returns will purely depend on selection of stocks.

Schemes such as Mirae Asset emerging Bluechip Fund, DSP BlackRock Small and Mid Cap Fund, Kotak Mid Cap Fund and Franklin India Prima Fund gave returns in the range of 11-12% in the last one year.

On Monday, the S&P BSE Midcap index closed at 12,057.27, up by 176.90 points or 1.49%. In the last one year, the index gave returns of around 10%.

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Neelesh Surana, CIO-equity at Mirae Asset Global Investments (India), said: “It has always been our strategy to focus more on stock selection.

We follow growth at reasonable price (GARP) strategy and returns have come by investing in right stocks. However, even now, we would continue to find quality stocks that are available at cheap valuations.”

Mirae Asset Emerging Bluechip fund just completed six years and have given returns of over 21% since its inception. Returns of several mid cap schemes in the last three years were in excess of 25-30%.

In the past two-three years, many midcap funds gave positive returns and attracted new investors. However, market participants say just because of past performance they should not invest only in midcap funds.

“This surge in mid cap index started in late 2013 and since then its has gone up. But now with index at all-time high, investors should not expect similar returns as seen in the past.

From now on, returns will be based on stock selection. Even now when the index is at all-time high, there are many schemes giving low returns and it is only because of poor stock election,” said an equity fund manager.

There are several funds that gave low single-digit return and even negative returns in the last one year.

Several fund managers are of view that though medium- to long-term outlook looks positive, markets are likely to have some correction going forward.

“Investors should not come looking at one or three year returns of funds and should diversify the portfolio at this juncture,” a fund manager from a top fund house said.

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