Mutual Funds

Why Mirae Asset Emerging Bluechip is a good investment

Maulik Madhu BL Research Bureau | Updated on June 19, 2021

Go for this ‘large and mid-cap category’ fund for stability alongside growth

 

If you like the stability of large-caps but want some exposure to mid-caps to boost your return, a top performing fund from the ‘large and mid-cap’ category can be a good option.

Mirae Asset Emerging Bluechip is among the top performers in this category. Earlier a mid-cap fund, it was later recategorised as a large and mid-cap fund after SEBI’s mutual fund recategorisation exercise in 2018. Such funds must invest at least 35 per cent of their assets each in large-cap and mid-cap stocks.

Investors with a small monthly surplus and an investment horizon of at least three years can consider doing SIPs in this scheme. Mirae Asset Emerging Bluechip is by far the largest scheme in this category and has not been accepting lump sum investments since October 2016. You can start a SIP for up to a maximum of ₹2,500 a month.

 

Performance

Launched in 2010, Mirae Asset Emerging Bluechip has been managed by Neelesh Surana since inception. The scheme has outperformed its peers over the past several years. Keep in mind, though, that the large and mid-cap category was created only in 2018 and many other funds from other categories were bucketed into the large and mid-cap category only then.

That said, the scheme has fetched investors attractive returns and has managed downsides well, making it a worthwhile investment. It is rated five-stars under BusinessLine Portfolio Star Track MF Ratings.

Mirae Asset Emerging Bluechip has outperformed the category over three and five-year periods on a rolling return basis. The scheme has generated an average three-year return of 15.9 per cent and five-year return of 16.0 per cent over the last seven-year period. During this period, the 3-year and 5-year return for the category was 9.4 per cent and 9.2 per cent, respectively.

In the last five years, the scheme has not only managed downsides well but has also captured upsides. This can be gauged from its downside capture ratio (DCR) and upside capture ratio (UCR). The two ratios provide a snapshot of the extent of the fall/rise in the scheme NAV compared to the benchmark index, here the Nifty LargeMidcap 250 TRI.

A DCR of 93 per cent (below 100 per cent) for the scheme implies it has fallen less during periods when the benchmark index fell. The scheme has also captured more of the upside (UCR of 107 per cent) during times when the index rose.

From January to the March 2020 low, the scheme lost a tad less than the benchmark index’s 35.5 per cent fall. From the rally that followed the March fall, the scheme gained 129 per cent against the index’s 127 per cent till date.

Portfolio details

The scheme can allocate 35 to 65 per cent of its assets to large and mid-cap stocks. It follows the approach of investing in high-quality businesses at a reasonable price.

Prior to its reclassification in 2018, Mirae Asset Emerging Bluechip held a fifth of its portfolio in small-caps. Since then, the small-cap allocation has been brought down to well under 10 per cent. In tandem, the large-cap allocation has been nearly doubled from around 30 per cent in 2017-end to a little under 60 per cent today. The mid-cap allocation has been kept around 35 per cent by and large.

The scheme’s large cap-heavy portfolio provided a buffer against the sharp market fall in February-March 2020 as also helped it capture the gains from the subsequent rally. As of May 2021, the scheme held around 57 per cent in large caps, 35 per cent in mid-caps and 7 per cent in small-caps.

Banking has, for a long time, occupied the top slot in the scheme portfolio. Healthcare and auto and auto ancillaries have been other key sectors across many months. As of May 2021, the scheme held 22.8 per cent, 10.7 per cent, 10.1 per cent and 9.8 per cent of its assets in banking, auto and auto ancillary, healthcare and IT stocks, respectively. The top three sectors accounted for around 44 per cent of the scheme assets. While the sector concentration is higher than a few years back, given the sharp increase in the scheme AUM during this time, it is not that significant a change.

Published on June 19, 2021

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