NFO Open Date: November 11, 2022
NFO Close Date: November 25, 2022
An opportunity to invest in burgeoning domestic growth potential
High Growth Companies, Turnaround beneficiaries & Compounders with steady earnings growth to form portfolio for Canara Robeco Mid Cap Fund
Meaningful improvement seen in financials of mid cap companies over last decade
Suitable for seasoned investors with an investment horizon of 5+ years
by Suman Gupta
Mumbai, November 11, 2022: Canara Robeco Mutual Fund, one of the leading asset management companies in India, today announced the launch of Canara Robeco Mid Cap Fund, an open-ended equity scheme which would predominantly invest in equity and equity-related instruments of mid cap companies, with the objective of generating capital appreciation over a longer term of five years and above.
Canara Robeco Mid Cap Fund’s New Fund Offer (NFO) opens today, November 11, 2022, and closes on Friday, November 25, 2022.
As a fund house, while Canara Robeco Mutual Fund’s ethos is to invest in robust growth-oriented businesses, with competent management and a reasonable valuation, Canara Robeco Mid Cap Fund aims to invest in mid cap companies that are at the confluence of industry growth, company growth and management pedigree.
Speaking on the occasion, Mr. Rajnish Narula, MD & CEO, said: “Canara Robeco Mid Cap Fund would offer an attractive opportunity to create wealth over the long term through both the lumpsum and SIP mode of investment. Mutual Fund investors who are comfortable displaying patience to ride market volatility, keeping an investment horizon of over five years, may benefit from risk adjusted returns.”
Mr. Shridatta Bhandwaldar, Head – Equities & Fund Manager, said:
The rising number of earnings growth leaders in the last few years within the midcap segment, with dominant 75 per cent of these businesses depending on domestic factors, offering better risk-adjusted returns from under-researched companies in the emerging themes and sectors, make for an attractive investment proposition in the Midcap segment”
“The portfolio of Canara Robeco Mid Cap Fund would comprise three types of buckets. The first bucket will focus on companies with high growth, which will identify leaders and domestic growth beneficiaries with superior earnings growth. Compounding companies that exhibit features of strong franchise durability, high cash flow generation, low capital intensity and minimal financial leverage, will form part of the second bucket. The third bucket would focus on cyclical beneficiary companies that showcase improved cash flows, increased return on capital from business turnaround, or industry cycle revival,” Mr. Bhandwaldar added.
It is to be noted that the above-mentioned selection and portfolio construction process will be followed by the fund manager and is subject to change based on market dynamics, economic scenarios, etc.
Mid cap companies are under-researched. The average CAGR performance for leaders within the mid cap segment has been far superior over a one-to-seven-year period, as compared to the S&P BSE Mid cap 150 index. The one-year average CAGR as of September 30, 2022, the most volatile period for the mid cap leaders, was 10 per cent, compared to the index’s one per cent. Likewise, the five-year average CAGR of mid cap leaders stood at 22 percent compared to 13 percent offered by the index and the seven-year CAGR stood at 23 percent as compared to 15 percent for the index.
The S&P BSE 150 Mid cap and Nifty 150 Mid cap TRI indices have rarely dipped into negative territory in three and five-year rolling CAGRs. This aspect stands in good stead for the companies in the mid cap segment.
Canara Robeco Mid Cap Fund may invest up to 35 per cent in equity and equity-related instruments of companies other than mid cap companies, debt and money market instruments and up to a maximum of 10 per cent in units issued by REITs and InvITs.
Canara Robeco Mid Cap Fund would allow lumpsum investments of a minimum of INR 5,000 during the NFO period. It will take investments via SIP, STP and SWP after the NFO period. The fund would be benchmarked against the S&P BSE 150 Mid Cap Index TRI.
Mr. Ajay Khandelwal and Mr. Shridatta Bhandwaldar are the fund managers for Canara Robeco Mid Cap Fund.
