Mirae Asset Mutual Fund, one of the fastest-growing fund houses in the country, has announced the launch of Mirae Asset Flexi Cap Fund. The NFO for the fund closes on February 17.

The flexi cap fund will invest across market capitalisation—large cap, mid cap and small cap, thus offering a large investment horizon to help investors capture the growth curves across sectors.

With over 30 schemes in the flexi cap category managing ₹2.46 lakh crore, this is the biggest space in the equity fund universe. Can Mirae Asset Flexi Cap give a run for the money to the popular flexi cap offerings such as Kotak Flexicap, HDFC Flexi Cap, Parag Parikh Flexi Cap and UTI Flexi Cap? Let’s find out.

About the fund

Mirae Asset Flexi Cap Fund comes from the house of Mirae Asset MF, which has, over the last few years delivered popular schemes such as Mirae Asset Tax Saver, Mirae Asset Emerging Bluechip, Mirae Asset Large Cap and Mirae Asset Midcap.

After a spate of passive fund launches by Mirae over the last two years, Mirae Asset Flexi Cap Fund is an actively-managed offering and that too in a highly competitive category.

Also read: Large-caps still offer a lot of scope for growth and price discovery: Mirae Asset MF CEO Swarup Mohanty

Being a flexi cap fund, the new fund can tap an extensive investible universe with no m-cap limits - across large cap, mid cap and small cap segments. The portfolio aims to have a blend of value and growth stocks. Thus, there will be diversification of ideas, sectors, caps and risk.

From a universe of nearly 600 stocks, Mirae Asset Flexi Cap will identify bottom-up stock stories in 4 company buckets: Fast growers (aggressive with higher than the competition growth), Stalwarts (well-established with long-term growth potential), Cyclicals and Sluggards (mature, slow growth). The fund’s in-house framework mapping quality and quantitative filters such as changes in valuations, trends in earnings, incremental RoCE etc. filters out stocks.

The fund’s strategy is centered around participating in high-quality growth businesses, up to a reasonable price and holding the same over an extended period.

The fund will be managed by Vrijesh Kasera, who is involved in managing schemes such as Mirae Asset Healthcare, Mirae Asset Hybrid Equity and Mirae Asset Equity Savings.

The minimum initial investment in the fund will be ₹5,000 and multiples of ₹1 thereafter. Mirae Asset Flexi Cap Fund will be benchmarked against the NIFTY50 TRI.

If redeemed within 1 year (365 days) from the date of allotment, the fund will charge 1 per cent of the applicable NAV as exit load. There is no exit load if redeemed after 1 year (365 days) from the date of allotment.

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The NFO offers both direct and regular plan.

Flexi cap category performance

Given this category is large with many schemes, category average returns and individual fund returns varies widely.

In the last year , flexi cap funds have given 1.44 per cent category average return, which is unimpressive compared to other diversified equity fund categories. HDFC, ICICI Pru and JM offerings are top performers with 5-12 per cent return, while UTI, Axis and PGIM are laggards.

In the 3-year period, flexi cap fund category has generated 13.2 per cent CAGR, with Quant, Parag Parikh, and PGIM offers coming out on top while Motilal Oswal, LIC and Taurus flexi cap funds were laggards.

In the 5-year period, Quant, Parag Parikh, and PGIM funds were top performers with 16-19 per cent CAGR while schemes belonging to Motial Oswal, Taurus and LIC were laggards.

Our take

Mirae Asset Flexi Cap is for investors who are looking at remaining invested for the long term i.e. 5 years and above. Flexi funds can form the foundation i.e. core of a portfolio for investors who are in the process of building a core portfolio. This is because such a type of fund offers exposure to large cap, midcap and small cap stocks using a single structure.

Also read: Investors take a liking to passive fund as most active funds underperform benchmark index

Since this is a new fund, allow the product time to build a good track record.