NFO: IDFC Midcap Fund

Jul 26, 2022

IDFC Midcap Fund is an open-ended equity scheme, which aims to generate long-term capital appreciation by investing predominantly in equities and equity-linked securities in the midcap segment. The midcap category has generated relatively better risk-adjusted returns across time periods compared to large caps and also facilitates broader diversification across various sectors. Moreover, the average size of companies in the midcap universe has expanded during the last three years.

The New Fund Offer will open for subscription on Thursday, July 28, 2022, and close on Thursday, August 11, 2022.

IDFC Midcap Fund will follow a 5 filter framework for the selection of stocks, helping build a high-quality, growth-orientated portfolio.

  • Governance/Sustainability involves selecting companies based on factors such as strong governance, capital allocation track record, and a sustainable business model, enabling the fund manager to take a long-term view of the business.
  • Capital Efficiency provides a structural opportunity for a business to earn an optimal return on the invested capital, which is key to creating value for shareholders.
  • Companies with a Competitive Edge in the industry could develop a strong franchise network, resulting in a value proposition for customers through cost/product differentiation.
  • Scalability paves the path for a larger market share, which could boost the earnings growth of the company in the long term.
  • Acceptable Risk/Reward is also an important parameter to evaluate companies considering the fact that it is important to buy businesses at the right price and if this discipline is not adhered to, it could lead to sub-optimal investment outcomes.

Source: Press Release

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