IDFC Mutual Fund today announced the launch of IDFC Midcap Fund. It is an open-ended equity scheme aiming to generate long-term capital appreciation by investing mostly in equities and equity-linked securities in the midcap segment.
Midcap mutual funds have generated good risk-adjusted returns across time periods compared to large caps. Mid-cap funds also facilitate broader diversification across various sectors.
Moreover, the average size of companies in the midcap category has expanded during the last three years. In a statement, IDFC Midcap Fund said it is well-positioned to provide investors with the opportunity to benefit from the strong growth potential of midcap companies over the long term.
The New Fund Offer will open for subscription on Thursday, July 28, 2022, and close on Thursday, August 11, 2022.
What’s special about IDFC Midcap Fund?
IDFC Midcap Fund will follow a 5 Filter Framework for the selection of stocks, helping build a high-quality, growth-orientated portfolio, according to the statement. This investment framework selects companies based on five fundamental parameters including Governance/Sustainability, Capital Efficiency, Competitive Edge, Scalability,
and Acceptable Risk/Reward.
Talking about the rationale behind launching the IDFC Midcap Fund, Vishal Kapoor, CEO, IDFC Asset Management Company Limited (AMC) said, “With the escalating inflationary pressures on the Indian economy, investors have realized the importance of investing in growth-oriented assets which could facilitate capital appreciation over the long term. The midcap segment demonstrates an opportunity for wealth creation over the years, a compelling risk-reward balance, and exhibits a broader sectoral representation compared to large-caps, thereby offering significant potential for growth with reasonable stability over the long term. IDFC Midcap Fund will provide investors an opportunity to benefit from the robust growth potential of fundamentally strong mid-cap companies.”
Sachin Relekar is the Fund Manager for IDFC Midcap Fund.
“IDFC Midcap Fund has a bottom-up investing approach for the construction of the portfolio, facilitating focus on the business-specific aspects and aligning the execution with a long-term view. While the fund invests predominantly in the mid-cap category, it adopts a disciplined approach and is flexible to allocate up to 35% of its net assets towards companies from the large-cap and small-cap categories,” said Relekar.
“The 5-filter framework for stock selection includes parameters that evaluate the governance of the company, capital allocation track record, a structural opportunity for the business to earn an optimal return on the invested capital, the value proposition for customers and shareholders, long-term earnings growth potential and an acceptable risk/reward opportunity. The fund is suitable for long-term investors who aim to invest in a diversified portfolio with participation across sectors and are looking to complement their core portfolio allocation with relatively higher long-term growth prospects,” he added.
(Mutual fund investments are subject to market risks. Please read the offer document carefully and consult your financial advisor before making any investment decision)