MUMBAI, 25 JULY, 2022 (GPN): IDFC Mutual Fund announced the launch of IDFC Midcap Fund, an open-ended equity scheme, which aims to generate long-term capital appreciation by investing predominantly in equities and equity-linked securities in the midcap segment.

The midcap category has generated relatively better risk-adjusted returns across time periods compared to large caps and also facilitates broader diversification across various sectors. Moreover, the average size of companies in the midcap universe has expanded during the last three years. IDFC Midcap Fund is well-positioned to provide investors an opportunity to benefit from the strong growth potential of midcap companies over the long term. The New Fund Offer will open for subscription on Thursday, July 28, 2022, and close on Thursday, August 11, 2022. Applications for the NFO can be filled on https://bit.ly/3J36qcQ.

The key differentiator of IDFC Midcap Fund is that it will follow a 5 Filter Framework for the selection of stocks, helping build a high-
quality, growth-orientated portfolio. This investment framework selects companies based on five fundamental parameters includingGovernance/Sustainability, Capital Efficiency, Competitive Edge, Scalability, and Acceptable Risk/Reward.

Governance/Sustainability involves selecting companies based on factors such as strong governance, capital allocation track record, and a sustainable business
model, enabling the fund manager to take a long-term view of the business. Capital Efficiency provides a structural opportunity for a business to earn an optimal return on the invested capital, which is key to creating value for shareholders. Companies with a
Competitive Edge in the industry could develop a strong franchise network, resulting in a value proposition for customers through cost/product differentiation. Scalability paves the path for a larger market share, which could boost the earnings growth of the company in the long term. Acceptable Risk/Reward is also an important parameter to evaluate companies considering the fact that
it is important to buy businesses at the right price and if this discipline is not adhered to, it could lead to sub-optimal investment
outcomes.

Highlighting the rationale behind launching the IDFC Midcap Fund, Mr. Vishal Kapoor, CEO, IDFC Asset Management Company
Limited (AMC) said, “With the escalating inflationary pressures on the Indian economy, investors have realized the importance of investing in growth-oriented assets which could facilitate capital appreciation over the long term. The midcap segment demonstrates an opportunity for wealth creation over the years, a compelling risk-reward balance, and exhibits a broader sectoral representation compared to large-caps, thereby offering significant potential for growth with reasonable stability over the long term. IDFC AMC has long-standing expertise in managing assets under the midcap segment under its existing funds, and market relative valuations turning
more attractive, IDFC Midcap Fund will provide investors an opportunity to benefit from the robust growth potential of fundamentally strong mid-cap companies.”

Mr. Sachin Relekar, Fund Manager for IDFC Midcap Fund added, “IDFC Midcap Fund has a bottom-up investing approach for the construction of the portfolio, facilitating focus on the business-specific aspects and aligning the execution with a long-term view. While the fund invests predominantly in the mid-cap category, it adopts a disciplined approach and is flexible to allocate up to 35% of its net
assets towards companies from the large-cap and small-cap categories. The 5-filter framework for stock selection includes parameters that evaluate the governance of the company, capital allocation track record, a structural opportunity for the business to earn an optimal return on the invested capital, the value proposition for customers and shareholders, long-term earnings growth potential and an acceptable risk/reward opportunity. The fund is suitable for long-term investors who aim to invest in a diversified portfolio with participation across sectors and are looking to complement their core portfolio allocation with relatively higher long-term growth prospects.”

Established in 2000, IDFC AMC is focused on helping savers become investors and create wealth. It is one of India’s Top 10 asset
managers with over ₹1,16,000 crore (~USD 12bn) Average Asset Under Management (AAUM) in June 2022. With a seasoned
management team, the AMC has an on-ground presence in over 50 cities and serves investors across over 750 locations in India. The AMC offers a range of prudently constructed investment products – across equities, fixed income, hybrid, and liquid alternatives – that aim to provide performance consistent with their well-defined objectives. With many industry-first initiatives, such as the adoption of UPI AutoPay to allow investors to create a mandate for autopay facility for their Systematic Investment Plans (SIPs) investments, IDFC AMC has been at the forefront of helping savers become investors. IDFC AMC takes pride in serving over a million folios, with a clearly articulated strategy and position for each product.

As a responsible corporate citizen, IDFC AMC continues to fulfill its commitments to promote education for children from weaker sections of society and contributed to the fight against Covid-19 in partnership with leading NGOs. Additionally, in 2022 over 30 employees volunteered to mentor college-going girls and prepare these young women for leadership roles, thereby creating a wider talent pool for India Inc and helping bridge the gender divide.-Ends.

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