ING Midcap Fund is an open-ended Mid cap oriented fund with an highest exposure in the Banking sector. Investors with high risk taking capacity can consider investing in this fund, reckons financial advisor Arnav Pandya.
Nature: Small & Mid cap
Inception: May 2005
Assets under Management: Rs 30 crore at the end of June 2012
Fund Manager: Jasmina Parekh
This is a mid cap fund that seeks the benefits of investing in mid cap stocks but with a controlled amount of risk. At the end of June 2010, the fund had the highest exposure to banks at 18 per cent of the portfolio followed by consumer non durables at 14 per cent and Pharma. The fund was conservative in its approach and the top company in the portfolio Aditya Birla Nuvo had an exposure of just 4 per cent. Andhra Bank, Crompton Greaves, Exide Industries, and Tata Chemicals were some of the other top holdings in the portfolio. The fund had a portfolio turnover ratio of 200 per cent and its benchmark was the CNX Midcap Index. The fund was underperforming the benchmark over the one, three, and five year time periods. Six months later there was a slight change in the pecking order of the sectors in thefund as consumer non durables was now the top sector with 20 per cent exposure. This was followed by Banks, Pharma, and Finance. Titan Industries was now the top holding and some of the other companies with high holdings were Asian Paints, Tata Chemicals, J&K Bank, and Lupin. The fund remained an underperformer over the one, three, and five year time periods. The change in the sectors continued to play out with Banks once again being at the top of the list at the end of June 2011 with an exposure of nearly one fourth of the total portfolio. Consumer non-durables, Pharma, and software were the other sectors with a high exposure. The portfolio turnover ratio had dipped slightly to 160 per cent. In terms of the individual stocks Coromandel International was the top holding followed by Andhra Bank, Union Bank, Godrej Consumer Products and J&K Bank. The underperformance of the fund continued for the various time periods. Six months later the fund had increased the liquid assets in the fund to over 8 per cent of the portfolio. The top sector was now Pharma with 11 per cent of the exposure followed by banks at 10 per cent. This showed that the risk element in the fund had also been reduced. In terms of the individual stocks, Ultratech Cement was the top holdingfollowed by Aditya Birla Nuvo, Bharat Electronics, HPCL, and GlaxoSmithKline Consumer Healthcare. The fund was now outperforming the benchmark over the one and three year time periods. There was a higher exposure to banks which was once again the top sector in the fund with 18 per cent of the portfolio in this area at the end of June 2012. Pharma, Auto ncillaries, Finance, Power, and Consumer non durables were the other sectors with a significant exposure. J&K Bank was now the top holding in the portfolio and some of the other top stocks included Divis Lab, ING Vysya Bank, HPCL, and National Building Construction Corp Ltd. The fund managed to be an outperformer over the one and three year time periods though the portfolio turnover ratio remained high. Investors with a higher risk taking ability can look at this fund as it concentrates on the mid cap space. Also the performance improvement in the fund has been witnessed just recently and this would need to be sustained to make it suitable for those looking for a longer term horizon of more than 3 years.