Midcap mutual funds have outperformed their benchmark index, even though this year is not good for the category.
While investors are concerned about the sharp drop in NAV (net asset value) of midcap funds, they should note that the mid-cap indices have actually failed. As of the recent reports, the Nifty Midcap 100 TRI index has gone down by 13.22 percent this year.
However, the midcap funds have performed much better, and have coped to outperform their Benchmark index. Based on reports, about 76 percent of midcap MF schemes, that is about 16 out of 21 midcap schemes have done better than their Benchmark index.
In brief, the midcap MF schemes have performed better than their Benchmark index by a good value of 3 percent. This year, the performance of the Midcap mutual funds is bluntly in contrast when compared to the performance of the same in the last year.
Actually last year, midcap funds offered high absolute returns, however, lagged behind their benchmark indices. In 2017, only three out of 21 midcap fund schemes performed better, with funds recording 43.4 percent average return with regards to 49.3 percent improvement in the underlying index.,
“The high dispersion in return among stocks in the mid-cap indices has contributed to the outperformance this year,” said Kaustubh Belapurkar, Director of Fund Research, Morningstar Investment Adviser India.
Mid-cap funds such as HDFC Midcap, Motilal Oswal Midcap 30, and DSP BlackRock Midcap schemes outperformed this year, while last year they performed poorly.
Funds like Invesco India Midcap, L&T Midcap, and Taurus Discovery have shown noticeable improvement now. Edelweiss Midcap and L&T Midcap outperformed both during this year as well as last year.
Similarly, Axis Midcap MF scheme, which was under the underperformers’ list last year, has recorded positive return so far in this year.
Various Midcap mutual funds that showed high underperformance last year have performed better this year, according to The Economic Times.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]