Why choose L&T Mid Cap Fund over other Midcaps?
  • One of the best mid-cap funds which aims to generate long-term capital.
  • Minimum SIP investment can be made with Rs. 500.
  • Belongs to one of the leading AMCs in India.
  • Best for investment with a long-term view, say 5 years or more.
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Aug 21, 2018 9 min read

Fund Review: L&T Mid Cap Fund Growth

Get all insights of L&T Mid cap Fund and why it is must for your portfolio.

Mid cap schemes have provided high returns recently after several months of dip. That’s why we have recently shared the best mid cap funds to invest in 2018. Taking the process ahead, we have provided a detailed review of one of the top performing mid cap funds from our recommendation, i.e., L&T Mid Cap Fund. Let’s find all the in-depth details of the scheme.

Who Should Invest in L&T Mid Cap Fund (G)?

This is ideally suitable for:

  1. Aggressive investors with a moderately High-Risk appetite.
  2. Investors who are looking forward to generating High Returns whilst being exposed to high volatility.
  3. Investors with a Long-term Investment Horizon of 5 years and above.

Facts About L&T Mid Cap Fund

Fund House L&T Mutual Fund
Inception Date August 09, 2004
Type Open-ended
Class Equity
Category Mid Cap
Net Assets (As on July 31, 2018) Rs. 3,066 Crore
Expense Ratio (As on July 31, 2018) 2.39%
Fund Managers Soumendra Nath Lahiri since June 2013 and Vihang Naik since June 2016
NAV (As on August 17, 2018) Rs. 142.54

How Well Has L&T Midcap Fund Performed in the Past?

Return AnalysisTrailing Returns3 - Year Rolling Returns with a gap of 6 months
ParticularsSince LaunchLast 5 YearsLast 3 YearsDec 2013 to Dec 2016Jun 2014 to Jun 2017Dec 2014 to Dec 2017May 2015 to May 2018
Benchmark: S&P BSE MidCap - 26.08% 13.68% 23.36% 16.19% 21.18% 14.74%
L&T Mid Cap Fund 20.87% 31.23% 15.61% 34.06% 25.81% 24.30% 19.57%
As on August 17, 2018

Considering the past record of this scheme of L&T MF, the fund has outperformed both its benchmark as well as the category at all time periods. Although in the past 3 years, the margin with which it has beaten the benchmark’s average has been reduced, the same has been maintained in the long-run. The past 5 year return of 31.19% is strong evidence of the outperformance of the fund beating both its category and benchmark’s average which have given 27.40% and 26.08 as on August 17, 2018.

Risk Analysis: L&T Mid-cap Fund

ParticularsSDBetaSharpeMax DrawdownUpsideDownside
Benchmark: S&P BSE MidCap 16.46 1 0.65 -14.55% 100 100
Category 16.62 0.95 0.48 -18.41% 89 98
L&T Mid Cap Fund 16.41 0.94 0.73 -19.17% 95 85
As on July 31, 2018
  • While looking at the past 3 years’ Standard Deviation and Beta coefficient of the scheme(both denoting the market volatility), one can tell that the risk that the scheme possesses is about the same as its category and benchmark.
  • Looking at the Sharpe Ratio (measuring risk-reward) of the fund, i.e., 0.73 against the benchmark’s and category’s average of 0.48 and 0.65, it can be clearly stated that the scheme delivers higher returns on the per unit risk that it takes.
  • Now, analyzing the Maximum Drawdown of the fund, which is 19.17% against the category’s and benchmark’s value of 18.41 and 14.55 percent, it can be said that the scheme involves a greater degree of risk.

What Portfolio Allocation of L&T Mid Cap Tells?

1. Market Capitalization

 portfolio aggregates

At present, the scheme has the maximum investment in mid-cap stocks, i.e., 80.54 percent, 7.43% in large-cap stocks, and the rest in small cap companies. The fund managers, Mr. S. N Lahiri and Mr. Vihang Naik follow a growth style of investing and the bottom-up stock picking strategy.

2. Sector Allocation

Basic Material (Agriculture, Chemical, Metal & Mining, Steel, Building Materials) 23.75%
Consumer Cyclical (Auto related industries, Travel & Leisure, Marketing Cos, Apparel & Furniture Mfg Cos) 16.73%
Financial Services 19.79%
Real Estate 3.09%
Communication Services 0.00%
Energy 1.18%
Industrial 17.16%
Technology 5.41%
Consumer Defensive 3.68%
Healthcare 9.20%
Utilities 0.00%

Going with the sector allocation, L&T Mid cap Fund’s portfolio constitutes 27 sectors and 77 holdings in all. This is evident of the strong diversification, and thus sound risk management done from the fund managers’ end. Considering the data above, the maximum allocation is done in the cyclical segments where good growth possibilities are seized.

The highest exposure of the fund is made in all the growth-oriented segments. Further, L&T Mid Cap Scheme is overweight on cement, construction, industrial, and chemical sectors and has selective exposure to financial institutions and banks.

3.Top Holdings

Stock NameWeightage (%)Absolute ReturnsValuation
1 Year5 YearP/BVPE
Bharat Financial Inclusion 3.7 38.98% 981.92% 5.66 26.72
Emami Ltd 3.27 3.09% 172.69% 12.96 78.42
Berger Paints India 3.14 38.7% 330.22% 14.18 64.46
The Ramco Cements 2.79 21.5% 349.14% 3.79 29.18
Graphite India 2.58 296.5% 1395.02% 8.24 12.31
Exide Industries 2.43 41.15% 123.91% 4.51 34.09
City Union Bank 2.29 30.53% 400% 3.1 21.9
Sundram Fasteners 2.14 67.50% 1928.17% 8.36 34.63
Abbott India 2.11 84.64% 493.54% 9.84 41.53
Cholamandalam Invest & Finance Co. 1.99 28.16% 585.49% 4.38 23.19
Returns: As on August 17, 2018

According to our analysis, 15 stocks have been added to the portfolio in January 2018, whereas 17 stocks were removed. This is evident of the high fund’s turnover of 78%. Such frequent portfolio churning done by the fund managers has been proved favorable for the fund, thus helping it to outperform the benchmark’s returns consistently.

SIP and Lumpsum Investment in L&T Mid Cap Fund

Time-PeriodSIP InvestmentLumpsum Investment
Invested MoneyGrowth ValueAbsolute ReturnsInvested MoneyGrowth ValueAbsolute Returns
3 Year 360,000 453,736 26.04% 100,000 154,680 54.68%
5 Year 600,000 1,041,283 73.55% 100,000 354,086 254.09%
10 Year 1,200,000 3,657,644 204.80% 100,000 76,012 476.01%
Returns: As on June 30, 2018

SIP Investment:

The monthly investment of Rs. 10,000 initiated 5 years before would have become Rs. 10,41,283 against the investment amount of Rs. 600,000.

Lumpsum Investment:

Lumpsum investment of Rs. 100,000 for the same duration would have grown to Rs. 354,086 at an annualized return of 50%.

A Final Note- Conclusion

Investors should notice that:

  1. The fund is seen holding the maximum investment in mid cap stocks, thus in the bull phase, it is bound to deliver stupendous returns.
  2. The historical returns and the strong bets taken by the fund managers depict that the scheme has and it will deliver handsome returns to the investors.

Here, the only thing to consider is that the investors should stay invested for a longer horizon and have the appetite for high risk.

If you find this scheme an ideal one for your portfolio, do not delay investing in it. You can easily make an investment through our online investment platform. For more suggestion or recommendations on other categories or schemes, stay tuned with us.

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Peer Comparison

FundLaunch1-Year Return3-Year Return5-Year ReturnExpense Ratio (%)Assets(Cr)
L&T Midcap Fund (G) Aug-04 7.99 15.63 31.81 2.39 3,066
DSP BlackRock Midcap Fund (G) Nov-06 9.95 13.49 29.85 2.19 5,676
Kotak Emerging Equity Scheme (G) Mar-07 8.79 13.32 31.43 2.34 3,327
ICICI Prudential Mid Cap Fund (G) Oct-04 7.5 9.82 29.2 2.41 1,535
Sundaram Mid Cap Fund (G) Jul-02 5.49 11.48 28.88 2.12 6,138

Invest in the top performing mid cap funds. To know about the best schemes, read 5 Best Mid Cap Funds to Invest in 2018

Besides, here’s our expert review on one of the other leading stars of the mid cap category, i.e., DSP BR Mid Cap Fund. To know all the details of the same, read Fund Review: DSP BlackRock Midcap Fund Growth

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