Is it worth investing in Axis Midcap Fund?
5paisa Research Team
13th December 2022 - 09:48 am
Value Research has given a five-star rating to Axis Midcap Fund. Read on to find out whether is it worth your attention.
A lot of people rely on mutual fund rating agencies such as Value Research, CRISIL, Morningstar, etc, before making any investment decisions. Investors simply look at the high rating or ranking of the funds by these agencies and invest in them without further research. Moreover, the bare minimum research that most investors do is to look at historical returns. However, it is always prudent to do some research before you invest in any mutual fund. In this article, we would be discussing how Value Research’s five star rated Axis Midcap Fund is, and whether it makes sense to invest in the same.
Axis Midcap Fund is the mutual fund scheme that seeks to predominantly invest in equity and related instruments of mid-cap companies to provide capital appreciation. The fund has diversified its assets across 61 stocks, whereas around 10% of its assets under management (AUM) is dedicated towards debt instruments. As of October 2021, its AUM stands at Rs 15,988 crore. In order to understand whether it's worth investing in, we would be looking at its risk as well as returns performance to the mid-cap category and its benchmark, that is S&P BSE Midcap Index.
For the study, we have taken 10 years of historical net asset value (NAV) data. Then we have calculated one-year, three-year and five-year rolling returns to understand the consistency of returns. On the risk side, we calculated standard deviation, downside deviation, Sharpe ratio, Sortino ratio and maximum drawdown.
Performance of Axis Midcap Fund
|
Particulars |
Rolling Returns (%) |
||
|
1-Year |
3-Year |
5-Year |
|
|
Axis Midcap Fund - Regular Plan - Growth |
23.50% |
18.96% |
17.69% |
|
Category Average |
21.72% |
16.88% |
16.40% |
|
S&P BSE MidCap Index |
19.53% |
15.58% |
16.19% |
Risk metrics of Axis Midcap Fund
|
Particulars |
Standard Deviation |
Downside Deviation |
Sharpe Ratio |
Sortino Ratio |
Maximum Drawdown |
|
Axis Midcap Fund - Regular Plan - Growth |
14.93% |
12.20% |
1.06 |
1.29 |
-29.44% |
|
Category Average |
15.61% |
13.37% |
0.84 |
0.98 |
-39.22% |
|
S&P BSE Midcap Index |
17.61% |
14.58% |
0.56 |
0.67 |
-46.78% |
Is it worth investing in?
Axis Midcap Fund is performing quite well when compared with the mid-cap category and its benchmark. When it comes to returns, Axis Midcap Fund outperformed its category and benchmark on a one-year, three-year and five-year rolling returns basis. Moreover, on the risk front as well, the fund poses a lower risk compared to its category and benchmark. In the past 10 years, covering approximately two market cycles, Axis Midcap Fund fell the least among other funds in the category as can be witnessed by the maximum drawdown metric. Therefore, we can say that on a risk and returns basis, this fund has shown good performance. However, this is a quantitative analysis of the fund. While investing, performing qualitative analysis is equally important. By qualitative analysis, we mean looking at the fund’s portfolio, sectoral allocation, fund manager, investment philosophy, etc. Moreover, it is also important to assess the suitability of this fund. This can be done by assessing your risk profile and understanding how much risk you can stomach.
Tanushree Jaiswal