PGIM India Mid-cap Opportunities Fund

About the fund:

PGIM India Midcap Opportunities Fund (PIMCF) is a mid-cap fund, as per the Securities and Exchanges Board of India (SEBI), a mid-cap fund Should invest a minimum 65% of total assets in equity and related securities of mid-cap companies and 35% of total assets are invested as per the fund manager’s view.

PIMCF Fund Manager:

PIMCF is managed by Mr. Aniruddha Naha, an MFC (Masters of Finance and Control) and he started working as a fund manager in PGIM India in April 2018. Prior to this, he has worked with Avendus and IDFC AMC

Who Can Invest?

The fund is suitable for investors who are seeking capital appreciation for a minimum period ranging from 3 to 7 years or more and have the ability to hold on to their investments in the fund during market cycles.

Exit Load: The fund has an exit load of 0.5% for the units redeemed from the investment within 90 days.

Stocks & Sectors

The top 10 Stocks and sectors are as follows:

PGIM India Mid-cap Opportunities Fund Asset Allocation:

High Turnover Ratio, Low-to-Moderate stocks concentration, and Enhanced return from exposure to mid & small-cap stocks

The current number of stocks in the PIMCF is 50. The fund has a turnover ratio of 117%, indicating a high churning and frequent change in its investments.

The top 5 stocks in the portfolio of PIMCF constitute only about 18.67% of the total portfolio and the top 10 stocks allocated in the portfolio is about 34.16%, which is very low.

This low to moderate asset allocation to the top 10 constituents of the portfolio leads to less dependency on the performance of top allocated stocks for the fund to deliver decent returns.

Exposure to small-cap stocks in the portfolio is at 13.40%. This exposure to small-cap stocks enhances the fund’s ability to generate returns during the uptrends of the market. However, increased volatility is also expected due to the same.

PIMCF Fund Performance & Risk Profile:

PIMCF Peer Comparison:

Fund Performance & Risk Profile:

Diversified Investments; Very Low Concentration of Stocks:

PIMCF has diversified its investments across the portfolio, i.e., Persistent Systems, the Top allocated stock in the portfolio carries only about 4.74% of the total assets, and the total top 5 and Top 10 stocks allocation is at18.67% and 34.16% respectively, and the remaining 40 stocks holding in the portfolio is at 65.84%. This gives its investors an opportunity to capture decent returns from the increase in the stock prices at the mid-portion of the portfolio also.

Similar Volatility as its Index and Good Risk-Return Ratios:

As shown above, the fund is able to deliver stable returns to its investors successfully over the years and the fund has a standard deviation of 24.63%, while its index S&P BSE 150 Midcap TRI’s standard deviation is at 24.83% and the 3-year Sharpe ratio of PIMCF is at 1.13, better than its benchmark S&P BSE 150 Midcap TRI.

Recommendation:

We recommend equity mutual fund investors, accumulate the units of the fund due to its ability to give stable returns to its investors with comparatively similar standard deviation and higher risk-return ratios than its benchmark. However, an individual’s ability to hold the investments during volatile periods in the markets remains an important factor to be seen.

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