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With the market hovering at record highs alongside lingering global geo-political concerns, an equity-oriented hybrid fund will be suitable for investors with a moderate risk appetite.
Mirae Asset Hybrid Equity, formerly known as Mirae Asset Prudence, is a relatively new fund with just a three-year track record. Nonetheless, it has been a top-quartile fund delivering 12 per cent annual returns over the past three years.
Hence, investors with a moderate-risk appetite, can consider investing through the systematic investment plan (SIP) route in this fund, as a diversifier.
SEBI’s new categorisation
Under SEBI’s rigid schemes, Mirae Asset Hybrid Equity falls under the aggressive hybrid fund category. It has a mandate of investing 65-80 per cent in equities and the balance 20-35 per cent in fixed-income securities. Since the fund had been investing 70-75 per cent of its assets in equities in the past, too, there will be minimal changes in the fund’s portfolio.
Mirae Asset Hybrid Equity is benchmarked against CRISIL Hybrid 35+65 - Aggressive Index.
The fund has outperformed its benchmark over the three-year period. Further, over a one-year period, it has posted a decent return of 10.7 per cent, outshining some of the other hybrid funds — Reliance Equity Hybrid, L&T Hybrid Equity and Aditya Birla SL Equity Hybrid ’95.
Performance
The fund, since its launch, hasn’t witnessed any major challenging bear market.
Both in 2016 and 2017, the fund beat the category average returns and delivered 8.5 per cent and 27.8 per cent gains, respectively.
Within equities, the fund holds 60 stocks in its kitty, spread across 26 sectors. With a bottom-up approach for stock selection, the fund has a well-diversified portfolio.
Barring a few top stocks, the allocation towards other stocks is less than 3 per cent, which mitigates the risk.
Banking is the preferred sector at all times, with the fund maintaining about 20 per cent allocation in this sector since early 2016. Software and consumer non-durables are the other preferred sectors.
Over the last one year, the fund has upped its allocation in finance and petroleum product sectors.
Mirae Asset Hybrid Equity also actively manages debt, with the majority of the debt allocation to government securities and commercial paper.
Current portfolio
In the recent portfolio, 74.7 per cent of exposure is to equities, 20 per cent in debt, and the remaining 4.6 per cent in cash.
HDFC Bank, Reliance Industries, ICICI Bank, Infosys and ITC have been the key blue-chip stocks held in the portfolio over the long term.
Hindalco Industries, Divi’s Laboratories, Bharat Electronics and Gateway Distriparks are a few stocks that have entered the portfolio over the past one year.
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