Skip to main content

Mutual Fund Review: Magnum Mid-cap



 

 

Magnum Mid-cap is yet to prove its mettle. The fund's high exposure to select stocks in the mid-cap space makes it a bit high on the risk scale

 

MID-CAP stocks and mid-cap oriented mutual fund schemes are like a double-edged sword. While they can make one super rich in market rallies, they can also throw one flat on the face in the downturn. Investors of Magnum Mid-cap have also faced this harsh reality in the past five years since the time fund was launched in March '05. Thus, despite the fund doing fairly well in recent times, the assets managed (AUM) by this fund today stand relatively lower than what it used to manage in 2006-07. The fund is currently managing about 330 crore of investor money.

PERFORMANCE :

To summarise the fund's performance in brief, Magnum Mid-cap has had a fantastic performance in some of the most bullish years of the market in the last five years, like in 2006 and 2007 and then again in 2009; while the meltdown year of 2008 saw the fund's net asset value (NAV) going virtually down the drain. In fact, by mid-December '08, the fund was trading at an NAV, below its face value of 10 per unit, implying that it notionally lost all what it had made in the previous three years since its launch in 2005.


   The timing for the launch of this mid-cap oriented fund, at the beginning of one of the wonderful rallies that the Indian equity markets have ever witnessed, could not have been better. It returned a whopping 52% gain in the very first year of its launch, outperforming its benchmark, the CNX Midcap's 38% returns by extremely good margins. The following years of 2006 and 2007, that witnessed the market's rally at a stupendous pace, saw Magnum Mid-cap put up an impressive performance with 47% and 71% returns respectively in these two years against CNX Midcap's 29% and 77% respectively.


   In 2008 however, Magnum Midcap was lifted off its ground as its NAV declined by almost 72% as against the decline of about 60% in the CNX Midcap in that single year alone. This was a big shot in the back for investors of this scheme as the fund plunged to its all-time low rankings after this disastrous performance.
   However, to the relief of most investors, the fund was quick to recover most of its losses in the following year 2009, as it returned about 104% against the recovery of about 99% made by the CNX Midcap. By the end of 2009, Magnum Mid-cap was trading at an NAV of 21.8, a much desired recovery after its NAV fell to almost 9 per unit in December '08.


   As far as the performance in the current calendar year is concerned, so far, the fund has delivered about 12% returns since January this year, which appears quite decent in light of the extreme volatility that the broader market indices have faced this year. The fund's benchmark, the CNX Midcap Index, has however returned about 18% returns so far in the current calendar year.

PORTFOLIO:

A mid-cap oriented fund, with just about 30 stocks in the portfolio, raises the risk quotient of the fund. Currently, the top ten holdings of the fund alone account for nearly 50% of the fund's equity portfolio, making it suitable for investors with a relatively higher risk appetite. As far as the sectoral allocation is concerned, the fund has a fairly high exposure in the FMCG space with GSK Consumer Healthcare alone accounting for about 6.5% of its FMCG composition. With mid-cap FMCG and healthcare sectors doing reasonable well for quite some time now, the fund has already made a neat 20% gain on this stock alone since the time it invested in this stock in February '10.


   As far as healthcare is concerned, while the fund currently has about 8% exposure in this sector, the same has been increased only recently, May '10 onwards, and thus, this sector is yet to reap in gains for this fund. Its stocks under this sector include Cadila Healthcare, Dishman Pharma and Ipca Labs

.
   Given its mid-cap orientation, the fund has more of an opportunistic approach towards investment rather than a long-term holding strategy. It is thus quite proactive in churning its portfolio with most of its current holdings less than a year old. The only exception to this investment strategy is its investment in GMDC, which it has been holding since February '07 and Elecon Engineering, invested in in May '06. Of these, the fund has made a neat kill in GMDC with nearly 175% absolute gains in the last three and a half years of its investment in this stock.

OUR VIEW:

A mid-cap fund with relatively high exposure to select stocks takes Magnum Mid-cap a bit high on the risk scale. Moreover, notwithstanding the fund's decent performance in market rallies, it has failed to cushion its fall in the downturn. While those who had invested into this fund right at its NFO stage in 2005, have made around 146% gains from this scheme till date, these gains appear belittled when compared with CNX Midcap's absolute gains of 199% during this period. Magnum Mid-cap is thus yet to prove its mettle before it can be rated at par with some of the better performing mid-cap schemes of the MF industry.

 


Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now