Mutual Funds

Mirae Asset Emerging Bluechip: For your long-term goals

Yoganand D | Updated on June 15, 2019 Published on June 15, 2019

The fund has clocked annual returns of 18.6% and 21% over three and five years, respectively

Investors looking for the stability of large-caps as well as a boost to returns from mid-cap stocks can invest in large- and mid-cap funds. Mirae Asset Emerging Bluechip is a good bet in this category. The fund’s allocation towards large-caps (top 100 companies by market capitalisation) and mid-caps is 35-65 per cent of its portfolio.

The fund is benchmarked against the Nifty LargeMidcap 250 (TRI), and over the past one-, three- and five-year periods, it has beaten the benchmark by a comfortable margin of 4-8 percentage points.

Mirae Asset Emerging Bluechip has outshined its peers in the large- and mid-cap category including Canara Robeco Emerging Equities, ICICI Prudential Large & Mid Cap and L&T Large and Midcap.

Considering the current market volatility where large-caps could help contain downsides and the fact that mid-caps have lost some of the froth over the past year, investors with a long-term horizon can bet on this fund through the SIP route.

Performance and strategy

The fund has clocked annual returns of 18.6 per cent and 21 per cent over longer time-frames of three and five years, respectively. In the short term, over a one-year period, it has delivered returns of 10 per cent.

The scheme has been the top performer in its category across all time-frames.

The fund almost fully invests in equities and rarely takes cash calls. It invests at least 35 per cent in large-cap stocks and a minimum of 35 per cent in mid-cap stocks.

In May 2019, it allocated 53 per cent towards large-caps, about 35 per cent to mid-caps, and 11.7 per cent towards small-caps.

The higher allocation towards large-caps could be due to stable performance by large-caps even as mid-cap stocks continue to witness correction.

The large-cap index has gained over 7 per cent whereas the mid-cap index has slumped about 4 per cent over the past year.

The scheme has been good at limiting the downside well, as it it did during the market corrections in 2011 and 2018. During the choppy markets of 2015 and 2016, the fund managed to deliver double-digit returns.

Banking is the top preferred sector. The scheme has marginally reduced its exposure in the consumer non-durables and software sectors and upped its allocation in the finance as well as pharma sectors over the past six months.

Moreover, it exited pesticides and hotels but added sectors such as power, industrial capital goods and minerals in this period.

The fund has about 61 stocks in the kitty.

Barring a few top holdings, the individual allocation to stocks is less than 3 per cent, mitigating concentration risk.

Larsen & Toubro, HDFC Life Insurance Company and TCS are some of the recent additions to the portfolio.

Petronet LNG, Tata Motors and Mahanagar Gas are a few exits.

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