Mid-small cap funds category seeks to generate capital appreciation from a diversified portfolio of equity and equity related instruments by following a value investment strategy. The funds in the category invest largely in small and mid-cap companies that are trading at a considerable discount to their intrinsic value.
SEBI’s Definition of Mid-Small Cap Funds
- Mid Cap Fund:
- Scheme Characteristics: Minimum investment in equity & equity related instruments of mid-cap companies – 65% of total assets
- Uniform Description: An open-ended equity scheme predominantly investing in mid-cap stocks
- Small-cap Fund:
- Scheme Characteristics: Minimum investment in equity & equity related instruments of small cap companies – 65% of total assets
- Uniform Description: An open-ended equity scheme predominantly investing in small-cap stocks
#1 Mid-Small Cap Funds: IDFC Sterling Value Fund – Reg – Growth
The IDFC Sterling Value Fund (IDFC Sterling Equity Fund) seeks to invest in small and mid-cap companies that are trading at substantial discount to their intrinsic value. The fund is ably managed by Daylynn Gerard Paul Pinto since Oct 2016 and has generated 22% returns over the past five years.
The fund is expected to continue its outperformance over the long term, given the kind of opportunity that exists in the space.
#2 Mid-Small Cap Funds: Aditya Birla Sun Life Small cap Fund – Direct – Growth
Aditya Birla Sun Life Small Cap seeks to invest primarily in small cap companies and is managed by Jayesh Gandhi since Dec 2014. The fund has given significant out performance over five-years generating over 26% returns in absolute terms.
The fund has higher risk given its small-cap bias but is expected to outperform considerably over the long term.
#3 Mid-Small Cap Funds: Canara Robeco Emerging Equities Fund – Direct – Growth
Canara Robeco Emerging Equities Fund is a four-star rated fund that has a mid-cap bias. The fund has generated healthy returns consistently under the leadership of Ravi Gopalakrishnan who managed the fund since September 2012. There has been a change at the helm with Miyush Gandhi taking the charge since April 2018.
The fund has generated around 30% returns in five year period and is expected to continue with its consistency given the fundamental approach adopted by the team.
#4 Mid-Small Cap Funds: DSP Midcap Fund – Direct – Growth
The fund has generated over 25% returns over the five year period and is likely to continue with its performance streak over the long term backed by its performance first approach.
#5 Mid-Small Cap Funds: Franklin India Smaller Companies Fund – Direct – Growth
Franklin India Smaller Companies seeks to invest over three-fourths of the portfolio corpus in smaller companies that are fundamentally sound and offer growth opportunity. The fund is managed by Hari Shyamsunder and Srikesh Nair since May 2016 and has generated over 28% returns over the five-year period.
The fund is likely to outperform over the long term considering the information asymmetry that is available in these segment.
#6 Mid-Small Cap Funds: HDFC Mid-Cap Opportunities Fund – Direct – Growth
HDFC Mid-Cap Opportunities Fund is a remarkably consistent performer in its category and has a mid-cap tilt to its portfolio. The fund has generated over 25% returns over the five year period and is ably managed by Chirag Setalvad since May 2007.
The fund is expected to continue its record over the long term backed by strong bottom-up stock selection method adopted by the fund manager.
#7 Mid-Small Cap Funds: Mirae Asset Emerging Bluechip Fund – Direct – Growth
Mirae Asset Emerging Bluechip Fund is a five star rated fund that has generated considerably returns of over 29% during the five-year period. The fund is ably managed by Neelesh Surana since May 2010.
The fund is likely to continue with its performance given its mid-cap bias that provides information asymmetry thereby providing a fertile ground for investment.
#8 Mid-Small Cap Funds: UTI Mid Cap Fund – Direct – Growth
UTI Mid-cap fund is a seasoned fund in the mid-cap space and seeks to avoid excessive risk-taking. The fund is managed by Lalit Gopalan since January 2016 and has managed to give an impressive show consistently generating over 25% returns during the five-year period.
The fund is likely to continue its consistent performance over the long term given it’s balancing between risk-return profile for the category.
Our Approach to Evaluating Best Mid-Small Cap Funds:
We have evaluated based on both qualitative and quantitative factors such as returns, fund size, fund managers, the reputation of fund house, and investment philosophy. Here is our analysis:
|Mid-Small Cap||Weighted Average|
|Annualized Return %|
|1 Year||3 Years||5 Years||10 Years||Since Inception|
|IDFC Sterling Value Fund||2548.22||18567.91||24.77||14.02||22.37||18.89||18.49|
|Aditya Birla Sun Life Small Cap Fund||2069.73||5544.8||16.92||18.89||27.69||16.05||13.83|
|Canara Robeco Emerging Equities Fund||3235.23||72754.25||16.88||15.56||29.71||18.29||18.48|
|DSP Midcap Fund||5389.58||33787.84||12.42||14.92||25.49||17.61||16.23|
|Franklin India Smaller Companies Fund||7128.27||26360.59||15.54||15.14||29.82||18.60||15.75|
|HDFC Mid-Cap Opportunities Fund||19891.09||14254.94||13.58||14.96||26.34||19.57||17.45|
|Mirae Asset Emerging Bluechip Fund||5131.36||63172.14||13.46||17.47||30.09||N.A||22.58|
|UTI Mid Cap Fund||4166.76||16711.79||15.07||10.99||27.75||17.39||19.45|
Good for you investment 🙂 If you have any questions, feel free to ask in the comments.