Five years ago I decided to start investing in mid cap mutual fund. There were quite a few of them available for me to choose. Thus, I employed a complex pseudo-random selection algorithm, predominantly utilized by juveniles who, in a display of basic decision-making, chant a seemingly nonsensical yet rhythmically precise incantation. This chant, rich in assonance and consonance, serves as a pretext for arbitrarily designating a mutual fund as the best one, and is often accompanied by the unspoken implication that the outcome is somehow imbued with a semblance of extensive research, despite the process being fundamentally whimsical and capricious.
My algorithm pointed to Franklin India Prima Fund which was one of the oldest with the fund starting way back in 1993. Initially I used to invest only lumpsum amount as when I had surplus. But starting Aug-2021 I decided to start an SIP in the fund. During the market crash of COVID-19, I continuously invested in the fund accumulating units at a lower price.
While the XIRR of 32% appears impressive, a comparison with the Nifty Midcap 50 returns reveals that the fund has consistently underperformed since I began investing in it.
Investment through the years
Returns
Profit
XIRR
How does Franklin India Prima Fund stack up against its competitors?
In the above sections I have demonstrated my investment pattern in the Franklin India Prima Fund and compared its performance against the Nifty Midcap 50 over a period of 5 years. But how does it fare against its competitors? Let’s find out.
I analysed CRISIL’s Mutual Fund Ranking and compared my returns to each of the mid-cap mutual funds. Here’s how I conducted my calculations:
- I included only those funds that were established before my first investment in the Franklin India Prima Fund. Therefore, you won’t find fund ITI Mid Cap Fund in the list, as it was launched after my first investment in the Franklin India Prima Fund.
- For the competitor funds, I used the same investment amount and dates as those for my investment in Franklin India Prima Fund. This approach allowed me to answer the question, “What if I had invested in ABC Midcap Fund?”
The table below illustrates the profit percentages I would have earned from the Franklin India Prima Fund and its competitors. It’s clear that I would have been significantly better off investing in the Motilal Oswal Midcap Fund. However, this doesn’t capture the journey each fund took to reach their current positions.
| Fund | Profit Percent (as of 01-Aug-2024) | CRISIL MF Ranking (as of 30-Jun-2024) |
|---|---|---|
| Aditya Birla Sun Life Midcap Fund | 89.9% | 4 |
| Axis Midcap Fund | 82.8% | 3 |
| Baroda BNP Paribas Mid Cap Fund | 99.1% | 3 |
| DSP Midcap Fund | 79.1% | 5 |
| Edelweiss Mid Cap Fund | 116.7% | 2 |
| Franklin India Prima Fund | 93.4% | 3 |
| HDFC Mid-Cap Opportunities Fund | 111.7% | 2 |
| HSBC Mid Cap Fund | 98.8% | 3 |
| ICICI Prudential MidCap Fund | 100.5% | 2 |
| Invesco India Mid Cap Fund | 101.4% | 3 |
| Kotak Emerging Equity Fund | 103.7% | 3 |
| LIC MF Midcap Fund | 94.4% | 2 |
| Mahindra Manulife Mid Cap Fund | 118.3% | 1 |
| Motilal Oswal Midcap Fund | 136.9% | 1 |
| Nippon India Growth Fund | 113.5% | 2 |
| PGIM India Midcap Opportunities Fund | 88.8% | 5 |
| SBI Magnum Midcap Fund | 95.8% | 3 |
| Sundaram Mid Cap | 99.9% | 3 |
| Tata Mid Cap Growth Fund | 100.5% | 3 |
| UTI Mid Cap Fund | 91.5% | 4 |
The below line chart demonstrates the performance of various mid cap mutual funds over the past five years. Notably, the PGIM India Midcap Opportunities Fund outperformed all other mid cap funds—that too by a significant margin—until April 2023. However, the fund’s performance has declined since then.
Another effective way to analyze mid cap mutual fund performance is through a bar chart race. The below visualization highlights the dominance of the PGIM India Midcap Opportunities Fund until April 2023. Since then, several other funds have overtaken it. As for the Franklin India Prima Fund, it has consistently ranked among the bottom five!