IDFC Mutual Fund’s midcap fund has opened for subscription today. This is an open-ended equity scheme that aims to generate long-term capital appreciation by investing predominantly in equities and equity-linked securities in the midcap segment.

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The New Fund Offer (NFO) will close for subscription on August 11, 2022.

About the fund

IDFC Midcap Fund will follow a 5 filter framework for the selection of stocks, helping build a high-quality, growth-orientated portfolio, the fund house said in a statement. This investment framework selects companies based on five fundamental parameters including governance/sustainability, capital efficiency, competitive edge, scalability, and acceptable risk/reward.

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The fund invests predominantly in the mid-cap category. It adopts a disciplined approach and is flexible to allocate up to 35 percent of its net assets towards companies from the large-cap and small-cap categories.

Aim

IDFC Midcap Fund will provide investors an opportunity to benefit from the robust growth potential of fundamentally strong mid-cap companies, the fund house said.

Highlighting the rationale behind launching the IDFC Midcap Fund, Vishal Kapoor, CEO, IDFC Asset Management Company Limited (AMC) said, “With the escalating inflationary pressures on the Indian economy, investors have realized the importance of investing in growth-oriented assets which could facilitate capital appreciation over the long term. The midcap segment demonstrates an opportunity for wealth creation over the years, a compelling risk-reward balance, and exhibits a broader sectoral representation compared to large-caps, thereby offering significant potential for growth with reasonable stability over the long term."

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Sachin Relekar, Fund Manager for IDFC Midcap Fund added, “IDFC Midcap Fund has a bottom-up investing approach for the construction of the portfolio, facilitating focus on the business-specific aspects and aligning the execution with a long-term view.

Who should invest?

The fund is suitable for long-term investors who aim to invest in a diversified portfolio with participation across sectors and are looking to complement their core portfolio allocation with relatively higher long-term growth prospects, the fund house said.

Is midcap category a good bet?

The midcap category has generated relatively better risk-adjusted returns across time periods compared to large caps and also facilitates broader diversification across various sectors, according to IDFC Mutual Fund.

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Moreover, the average size of companies in the midcap universe has expanded during the last three years, the fund house said.

(Edited by : Anshul)