Do you invest in this Mid Cap fund?

Mid cap index is outperforming the broader market reflected by Nifty & Sensex and touching its all time highs. Clearly the mutual funds focusing on mid and small capitalisation have been making hay in terms of performance and increase in investor participation in the sector. 

Kotak Emerging Equity Scheme - G has been one of the star performer catching fancy with investors willing to focus on mid cap stocks. The fund managed by Pankaj Tibrewal has Rs 798 crore of assets under management. The expense ratio for the fund is 2.38 per cent. 

The performance of the fund has been phenomenal to say the list with 6 months performance being at 10.9 per cent. For 1 year the fund has delivered 10.7 per cent. For A period of 2 years the annualised returns is 25.1 per cent and for a period of 3 years the fund has delivered 36.2 per cent on annualised basis. The returns for 5 years has been an impressive 20.91 per cent. 

A Rs 1000 SIP on monthly basis for a period of 3 years i.e from 12th of July , 2013 to 12th of July, 2016 would have fetched a return of 31.44 per cent. The SIP investment amount of Rs 36,000 over a three year period would be an impressive  Rs 56445.38. 

The top sectors the fund manager is betting on are Financials (24 per cent), Industrials and engineering (16.1 per cent), Consumer services (13.4 per cent), Consumer products (13.3 per cent), Automobiles (7.2 per cent) and Healthcare (7 per cent). 

In terms of top holdings the fund is currently holding on large component of cash at 4.4 per cent being held in short term money market securities. Whirlpool of India Ltd (3.5 per cent), Ramco Cements Ltd (3.4 per cent), Solar Industries (3 per cent) and IndusInd Bank (2.8 per cent) are the top holdings for the fund. 

The fund reflects an Alpha of 9.26 per cent and Sharpe ratio of 1.37. Thus reflecting the out-performance of the fund to its benchmark and also highlighting higher risk adjusted returns.