Mutual Funds

Mirae Asset Emerging Bluechip: A fund for all seasons

Vivek Ananth | Updated on February 02, 2020 Published on February 02, 2020

It is currently at the top of the return charts for three-, five- and seven-year time-frames

Investors looking to take exposure to large- and mid-cap stocks and build wealth in the long term (five to seven years) can invest in the Mirae Asset Emerging Bluechip Fund.

The fund has been the top performer over the past few years in the category.

It used to focus mostly on mid-cap stocks earlier, but after SEBI’s new norms on classification of funds, the fund has invested a majority of its corpus in large-cap stocks.

The scheme has been steadily outperforming its peers since the last time we reviewed its performance, about six months ago.

The fund also has a five-star rating on BusinessLine Portfolio Star Track MF Ratings. Its mandate of investing a minimum 35 per cent in large-cap stocks, up to a maximum of 65 per cent and a minimum of 35 per cent in mid-cap stocks helps the fund manager invest in stocks across the listed space to extract decent returns.

However, investors in this fund must show patience to build their wealth.

There could be periods of some underperformance, which might have to be taken in your stride. It must also be emphasised that the fund has done well during most of the turbulent times over the past two years or so.

Investment strategy

Mirae Asset Emerging Bluechip has been posting returns above its category average for the past seven years. It is currently at the top of the return charts for the three-, five- and seven-year time-frames.

It has surpassed the returns of its benchmark index, the Nifty LargeMidcap 250 total return index as well as outperformed other indices such as Nifty 200 total return index, in the same time periods.

The fund has outperformed its peers and its benchmark indices in the recent rising market seen over the past 15 months.

Its benchmark index gave returns of 14.96 per cent during the period, compared with 16.57 per cent for the fund. It was the second-best performing fund during the period.

 

 

 

As on December 31, 2019, the fund had around 33 per cent of its portfolio invested in stocks of financial services companies such as Axis Bank, IndusInd Bank, HDFC Bank, ICICI Bank and State Bank of India. Its largest holding is in HDFC Bank (6.92 per cent of its assets under management).

The top 10 holdings make up nearly 39 per cent of its total AUM, with four stocks — HDFC Bank, ICICI Bank, State Bank of India, IndusInd Bank and Axis Bank — making up for a little over 23 per cent of its total AUM.

Allocation

Before SEBI’s reclassification exercise, Mirae Asset Emerging Bluechip Fund used to focus mostly on mid-cap stocks. The scheme used to invest near or just over 40 per cent of its corpus in mid-cap stocks till December 2017. The fund didn’t invest more than one-third of its corpus in large-cap stocks till December 2017.

From January 2018, it has steadily increased its allocation to large-cap stocks to more than 50 per cent of its assets.

This could explain its consistent outperformance.

Large-cap stocks have been performing better than mid- and small-cap stocks for the past 18 months or so.

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Published on February 02, 2020
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