MF Select

Reason for recommendation

L&T Midcap Fund-Direct Plan

The 18-months ending January 2018 has been exceptional for many mutual fund investors and especially to those who had invested in mid-cap and small-cap funds. However, post that, these funds were in the centre of the storm and have corrected a lot. This has again created opportunity in this space and risk reward is tilted towards rewards. Therefore, this time we are recommending a fund that is best-positioned to exploit the growth opportunities in this category. However, this fund is suited only to those investors who are willing to take a moderate risk and have a slightly longer investment horizon. L&T Midcap Fund is one such fund from the mid-cap stable that you can look to start your monthly SIP. The fund has been able to contain its fall in recent times.



The mid-cap category year till date (15/11/18) has fallen by 13.63 per cent compared to 12.74 that the fund fell. Even in the trailing three month period, the fund has fallen to 7.32 per cent compared to the category average of 8.75 per cent. The fund holds growth potential in the current scenario based on its present holding that exploits the opportunities arising due to shifting from unorganised to organised sectors on the back of government’s push for digitization and expected earnings recovery to support valuation expansion. The fund invests into quality mid-caps that are selected after they clear various filters like management quality, liquidity, competitive position and valuations. Going ahead, the presence of stocks such as Berger Paints, Graphite India and a couple of pharmaceutical companies are going to generate good returns for the fund and its investor.