ITI Mid Cap Fund NFO opens for subscription

With growth coming back, mid caps are likely to see strong improvement in revenues and profitability

Staff Writer   /   February 15, 2021

ITI Mutual Fund has announced the launch of new fund offering (NFO) focused on midcap space ITI Mid Cap Fund. The NFO opens on February 15 and is slated for closure on March 1. Read on to know more details.

Why looking at midcaps

Mid caps stocks have under performed large cap stocks for the last three years. This points to a situation where there is a good scope of finding under valued stocks in mid caps.

Mid caps have higher leverage to economic growth. So with improving growth, mid caps are likely to see strong expansion in revenues and profitability.

Why midcaps now

Investment in mid cap stocks provides superior returns over long term. At present, improving economic growth provides a bigger impetus to earnings of mid cap stocks.

Plus, the differential valuations provide great opportunity for stock picking.

Fund strategy

ITI Mid Cap Fund will buy only from mid cap universe as defined by AMFI.

Normally, the fund would be invested minimum 90% and no major cash call would be taken.

Maximum weight of a single stock will be 3% at the time of investment, leaving ample room for diversity.

ITI Mid Cap Fund aims to invest in good and sound businesses understood by the fund managers.

At least 80% of the portfolio will be of ‘core’ stocks and tactical bets will not be more than 20%.

Maximum 60 stocks are proposed for the portfolio.

The fund will scan emerging sectors with high growth potential – e.g., healthcare, logistics, non-lending financials, digitally enabled businesses, e-commerce, etc.

Also, on the radar will be companies gaining market share, companies with niche market positions, companies benefitting from shift from unorganised to organised sectors and companies who can be beneficiaries of Government policies: i) Atmanirbhar Bharat ii) Focus on creating infrastructure.

ITI Mutual Fund follows SQL equity investment philosophy. S stands for margin of safety, Q is quality of the business and L is low leverage.

NFO basics

NFO opens on – February 15, 2021

NFO closes on – March 1, 2021

Allotment date – March 5, 2021

The scheme re-opens for ongoing subscription – on or before March 15, 2021

Fund benchmark – Nifty Mid Cap 100 TRI

Fund manager –  George Heber Joseph CEO & CIO and Pradeep Gokhale Head – Equity

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