Our first edition (Apr’13) of Lucky 13 mid-cap ideas has returned 104% since inception vs. 72% for the CNX Midcap index, and our second edition (Apr’14) has yielded a bumper 86% vs. 43% for the index. Historically, mid-caps have always bested the broader market in the long run, especially in an improving macro climate.
Mid-caps pip large-caps over medium/long term: Mid-caps typically tend to outperform large-caps in the medium to long run in India. Over the past 10 years (Aug’05-Aug’15), the CNX Mid-cap basket of 100 stocks has delivered returns of 257% vs. 234% for the Nifty. This outperformance is visible in the past five-year period (Aug’10-Aug’15: CNX Mid-cap 50%, Nifty 48%) and also from the recent lows of Aug’13 (Aug’13- Aug’15: CNX Mid-cap 98%, Nifty 46%). With macro prospects improving at the margin, we expect mid-cap outperformance to continue over the long term.