HDFC Mid-Cap Opportunities Fund has rewarded its investors well. Its 5-year annualized returns of 27% put it in the top quartile. Worth noting is that even during the market downturns of 2008 and 2011, it managed to stem the fall to less than that of the category average. Coupled with a solid investment process and a proficient fund manager at the helm make it an excellent offering in its space.
Chirag Setalvad has managed the fund since its inception and his emphasis on quality stocks has played out well. He hunts for companies with proven track records, strong balance sheets, competent management teams and robust business models. So even though his portfolio tilts strongly towards mid- and small-cap stocks - they account for roughly 85% of assets versus 70% for a typical peer, investors need not get nervous.
The numbers make it clear that those who hang on are well rewarded.
Senior analyst Vicky Mehta revisited the Analyst Rating and assigned the fund the highest. HDFC Mid-Cap Opportunities Fund has been upgraded from Silver to Gold. To read his analysis on HDFC Mid-Cap Opportunities Fund, click here.
Understanding the analyst rating
Morningstar analysts assign the ratings on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating.
Unlike the Morningstar Rating (star rating) which assigns 1 to 5 stars based on a fund's past risk-adjusted returns versus category peers, the Analyst Rating is the summary expression of Morningstar's forward-looking analysis of a fund.
The Analyst Rating is not a market call but reflects an analyst's conviction in the fund's ability to outperform its peer group and/or relevant benchmark on a risk-adjusted basis over the long term.
The methodology to arrive at this rating is based on five key pillars--Process, Performance, People, Parent, and Price.
To check out the ratings assigned to various funds, click here.