This Mid Cap Fund Turned a Monthly SIP of Rs 5,000 into Rs 1 Crore!

The fund has delivered an annualized return of 18.34 per cent and an absolute return of around 738.53 per cent, demonstrating the fund's robust performance.

This fund is an open-ended equity scheme predominantly investing in Mid-Cap stocks and has demonstrated remarkable growth over the years. Launched on July 19, 2002, the fund has grown to a substantial size of Rs 10,732.06 crore as per the latest information. This fund has made an exceptional wealth of its shareholders with just a monthly SIP of Rs 5000 per month.

Fund Composition and Performance

The Sundaram Mid Cap Fund has an impressive portfolio composition, with 95.32 per cent of its assets invested in domestic equities. The fund maintains a diverse allocation across different market capitalizations:

• Large Cap Stocks: 5.71 per cent
• Mid Cap Stocks: 53.8 per cent
• Small Cap Stocks: 12.19 per cent

This strategic allocation aims to balance risk and return, leveraging the growth potential of mid-cap and Small-Cap stocks while maintaining some stability with Large-Cap investments. The fund's portfolio includes 74 stocks, reflecting a diversified approach to mitigate risks associated with individual stock volatility.

Investment Objective

The primary objective of the Sundaram Mid-Cap Fund is to achieve capital appreciation by investing predominantly in diversified stocks categorized as mid-cap. The fund aims to capture the growth potential of these stocks, which are generally under-researched and have significant upside potential.

Financial Highlights

• Net Asset Value (NAV): Rs 1180.9759 (as of June 5, 2024)
• Fund Size: Rs 10,732.06 crore
• Expense Ratio: 1.76 per cent (lower than the category average of 1.88 per cent)

Historical Performance

Sundaram Mid Cap Fund turned consistent small investments into substantial wealth. If an investor had started a systematic investment plan (SIP) of Rs 5,000 per month on May 05, 2004, 20 years back, it would have grown to Rs 1,00,62,419 or 1 crore as per the current valuations. This reflects an impressive, annualized return of 18.34 per cent and an absolute return of around 738.53 per cent demonstrating the fund's robust performance over 20 years.

Investment Suitability

The Sundaram Mid Cap Fund is suitable for investors with a moderate to high-risk appetite, aiming to invest for at least 3-4 years. These investors should be prepared for the possibility of moderate losses, given the inherent volatility of mid-cap stocks. The fund is particularly attractive for those seeking high returns and willing to navigate short-term market fluctuations.

Fund Management

The fund is managed by S. Bharath and Ratish Varier, who bring expertise and strategic insight to the portfolio management process. The fund's portfolio turnover ratio stands at 43 per cent, indicating a relatively low frequency of stock changes compared to the category average of 231.77 per cent. This suggests a long-term investment approach, allowing time for selected stocks to realize their growth potential.

The Fund has established itself as a robust performer in the mid-cap category, offering investors substantial returns through disciplined investment strategies and expert management.  For those looking to start or diversify their investment portfolio, this Mid Cap Fund offers a compelling blend of growth potential and strategic risk management, backed by experienced fund managers and a well-diversified stock selection. Equity contains volatility, which also means it has the potential to generate multibagger returns. On the other hand, mutual funds are known for peaceful investment and stability.

Investors must keep investing and stay patient, allowing their money to grow.

Disclaimer: The article is for informational purposes only and not investment advice.