Mutual Funds

Mirae Asset Emerging Bluechip: A reliable performer

Yoganand D | Updated on October 19, 2020 Published on October 17, 2020

Over the past three and five years, the fund has delivered 6.1% and 13.5%, respectively

Investors who seek exposure to both large- and mid-cap stocks can invest in good funds from the large- and mid-cap fund category. Mirae Asset Emerging Bluechip is a fine choice in this category.

As the fund does not accept fresh lump-sum investments since October 2016, investors can opt for the systematic investment plan (SIP) route. Investors with a moderately high risk appetite and long-term horizon can buy the scheme’s units.

Performance

Mirae Asset Emerging Bluechip’s annualised return of 17.6 per cent over the past 10 years comfortably beats the benchmark Nifty LargeMidcap 250 TRI’s 8 per cent and the category average returns of 9.2 per cent.

Over the past three- and five-year periods, the fund has delivered returns of 6.1 per cent and 13.5 per cent, respectively, outpacing the benchmark returns of 4.3 per cent and 8.4 per cent.

In the past year, it has clocked a return of 12. 3 per cent, ahead of the benchmark’s 7.4 per cent and the category average return of 2.9 per cent.

The fund is also a table-topper, surpassing its category peers, across time-frames. It is rated five-star by BusinessLine Portfolio Star Track MF Ratings.

Strategy

As per its mandate, Mirae Asset Emerging Bluechip invests at least 35 per cent of its corpus in large-cap stocks and at least 35 per cent in mid-caps. Beyond this, the fund deftly adjusts its exposure across market caps.

For instance, in January 2018, the large-cap allocation was about 36 per cent, mid-cap at 40 per cent while small-cap allocation stood at 22 per cent of the portfolio.

Over time, the scheme gradually upped the large-cap allocation (around 59 per cent now), while trimming the allocation to mid- (about 36 per cent now) and small-cap stocks (about 4 per cent now).

The fund does take cash calls during periods of high market volatility. For instance, following the sharp market fall in March, it upped the cash allocation to 3.8 per cent and deployed it subsequently (0.65 per cent currently).

The scheme has contained downsides well. For example, in the 2018 market correction, its negative return of 5.4 per cent was lesser than the category average negative return of 7.4 per cent. This year, the category average has been negative 3.2 per cent so far, whereas the fund has been able to give a positive return of 1.2 per cent.

 

The fund adopts a bottom-up stock-selection approach, driven by value-investing in growth-oriented businesses. The portfolio is well-diversified with 58 stocks.

Barring the top five stocks, the weightage of the other stocks is less than 3 per cent, thus mitigating concentration risk.

Banking continues to be the top sector choice, though the allocation has reduced from a high of 25 per cent in February to 19.5 per cent in September. The increase in allocation in software sector from 7 per cent in February to 10.6 per cent in September has helped, given the recent strong performance of IT stocks such as Infosys, Tata Consultancy Services and Mindtree.

The strong rally in the stock of Reliance Industries has also helped the fund. Also, the scheme has upped allocations in consumer non-durables, finance and auto stocks.

Some of the other recently added stocks are Bharat Petroleum Corporation, HDFC, Gateway Distriparks and Avenue Supermarts.

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Published on October 17, 2020
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