Mutual Fund - Magnum Mid-cap Fund: Analysis

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The year 2008 did not start off too well for the markets, especially for the mid and small-cap stocks. Both bore the brunt of the bear attacks. With markets having undergone corrections, we take a look at how the portfolio of Magnum Midcap has changed over the past six months.

The fund's mandate is to invest in stocks with market capitalisation in the range of Rs 200-2,000 crore. With a secular bull run over the past couple of years, the market cap range of midcaps has, however, undergone a marked change. Over 90 per cent of the fund's investments are, therefore, now in mid-cap stocks.

In the six-month period, assets under management moved by 11 per cent with the NAV witnessing a growth of 15 per cent. Capital goods continued to be in the top slot despite the fund pruning its exposure to the sector. The fund reduced holdings in Crompton Greaves, Bharti Shipyard and Opto Circuits. Recently listed Transformers and Rectifiers was the addition.

The metal space underwent a minor rejig as holdings in Welspun Gujarat Stahl Rohren were pruned substantially. However, the fund accumulated shares of Usha Martin and Maharashtra Seamless. Jindal Saw was retained without any change.

The fund took a cautious stand in the construction sector and reduced holdings in Ansal Properties and Infrastructure and IVRCL Infrastructures by more than 50 per cent well ahead of the market correction. Nagarjuna Construction was, however, accumulated.

In the fertiliser space, the funds appears to have adopted a buy and hold strategy. Deepak Fertilisers, Gujarat Narmada Valley Fertiliser and Gujarat State Fertiliser and Chemicals were retained with marginal change in their holdings.

Cement stocks have been under pressure for almost a year now. The fund moved out of Sagar Cements completely and instead doubled its holdings in Mangalam Cement. India Cements saw accumulation. The fund held on to Kesoram Industries despite the steep correction witnessed by the stock in the last six months.

Asset allocation to the media sector was enhanced over the last three months with exposure to PVR doubling over the past month. During the same period, holdings in Crest Animation Studios were stepped up by more than 60 per cent. The fund trimmed exposure to stocks such as Jagran Prakashan and Shri Adhikari Brothers.