Investica’s Recommendation: Most consistent Large & Mid Cap Fund
June 20204 min read
Large & Mid Cap Fund is a new category created by SEBI during the re-categorization exercise in October 2017. As per SEBI’s definition, the Large & Mid Cap Fund should invest at least 35% of the corpus in large cap stocks and at least 35% in mid cap stocks. As a category, the Large & Mid Cap Fund is a great investment option as it is well-diversified and has lesser risk compared to concentrated mid or small cap funds.
Today, in Investica’s Recommendation, we will look at one of the most consistent large & mid cap funds in the industry.
Mirae Asset Emerging Bluechip Fund – Consistent Large & Mid Cap Fund
Mirae Asset Emerging Bluechip Fund was a mid cap fund earlier and was changed to large & mid cap fund post categorization. The Investment Strategy of the fund as stated by the fund house is as follows:
The fund invests 35-65%+ in large cap companies (top 100 companies by market capitalization) & 35-65% in mid cap companies (companies not part of top 100 companies but fall within top 250 companies by market capitalization).
The fund gives investors the opportunity to participate in the growth of emerging companies; which have the potential to be tomorrow’s bluechip companies.
An investment approach is a bottom-up approach: driven by value investing, in growth-oriented businesses.
The investment approach is aimed at participating in high-quality businesses up to a reasonable price; and holding the same over an extended period of time.
We will get in the details of portfolio and performance to understand; how this fund managed to beat it’s peers since it’s inception.
In terms of performance, the fund has been in the top quartile since inception. Even during the volatile markets, Mirae Asset Emerging Bluechip has held its ground by beating the benchmark and category average by a good margin. The reason for this exemplary performance lies in the way the fund is managed and the stock-picking style.
Let’s get a detailed view of the portfolio of Mirae Asset Emerging Bluechip Fund.
Current portfolio breakup of Mirae Asset Emerging Bluechip funds is 56.91% in Large Cap stocks, 34.67% in Mid Cap Stocks, 4.54% in Small Cap stocks, and remaining in cash. Over the period of the last 2.5 years; the fund manager has consistently increased the exposure to large caps from 36% to 57%; and reduced the Mid and small-cap exposure. This did work in favor of the fund as the valuation of mid and small corrected significantly over the last 2 years.
Additionally, the sectoral breakup of the underlying stocks looks like this:
The underlying portfolio is well diversified across various sectors. The fund manager invests in high-quality stocks with a good earnings potential and strong fundamentals. The size of the fund also matters when it comes to ensuring enough liquidity for existing investors. The fund avoids taking cash calls and hence has put limits on the inflow in fund by stopping all lumpsum inflows. At the same time, the SIP limit is at 25,000 per PAN.
Mirae Asset Mutual Fund manages about 41,000 crores of assets combining all the schemes. Mirae Asset Global Investments (India) Pvt. Ltd. was launched in November of 2007. It is one of the fastest-growing AMCs in India with some of the best performing schemes under their management.
Mirae Asset Emerging Bluechip Fund is managed by two fund managers:
- Mr. Neelesh Surana – CIO of Equity – Managing the fund since inception
- Mr. Ankit Jain – Associate Fund Manager – Managing the fund since January 2019
Should you invest in this Large & Mid Cap Fund?
As a category, Large & Mid cap fund needs to be part of your portfolio because it is well diversified and the fund manager has room to take calls to increase exposure in large cap or mid cap based on the market situation.
Mirae Asset Emerging Bluechip Fund’s consistent performance speaks for itself. And if you are an investor who wants to invest for more than 5 years, then this fund is an excellent addition in your portfolio. However, do note that, since lumpsum investments are not allowed in the fund, you can opt for SIP mode while investing in this fund.
Since, this is an equity fund, over the short term the returns can be negative. But, that shouldn’t affect your investment decision as over the long term, the performance of the fund gets normalized.
Do you want us to analyze and review a fund of your choice? Write to us and we will take that into consideration.
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