If you are looking for a fund that invests across sectors and market capitalisation categories, then Mirae Asset India Opportunities (Mirae Opportunities) fund makes for a decent candidate.

Not only has the fund bettered its benchmark over one and three-year periods, it has also outpaced a good majority of its peers.

While it's relatively short life (the fund was launched only in March 2008) could be a bit of a dampener — especially since it hasn't seen a full cycle of steep correction in the market along the likes of 2008 — the fund's performance in the volatile markets of late 2010 and 2011 instils some confidence. Its predominant large-cap bias is also in its favour in the current market.

Suitability

While the fund has proved its ability to ride secular market rallies — it had retuned splendidly in 2009 and 2010 — it still hasn't seen a full cycle of a steep market correction.

To that extent, the fund may not make a good fit to your core portfolio.

But that said, it makes for a good diversifier, as it has displayed sufficient skill in arresting NAV declines in volatile markets.

Performance

Over the last one year, Mirae Opportunities has delivered about 7.4 per cent, significantly better than its benchmark BSE 200.

Over this period, it also outperformed peers such as Kotak Opportunities, HDFC Premier Multi-Cap and Birla Sun Life India Opportunities. While it lagged UTI Opportunities during the period, its three-year returns outpaced the latter. A three-year compounded return of about 36.8 per cent puts the fund at the top of its category.

No doubt starting on a clean slate, with no ‘baggage' in the 2008 market slide, helped the fund immensely, but there's no denying credit to its stock, sector and asset allocation calls thereafter.

For instance, the fund was underweight on sectors such as real-estate, capital goods and construction that have been among the worst performers in the last couple of years.

While it did miss out on some opportunities in the auto sector, a high exposure to banks helped it make up for it.

Besides, unlike peer funds, it did not make any significant cash calls in early 2009, helping it ride the rally that followed early on.

Its returns in each of the three years since 2008 have surpassed that of funds such as Tata Equity Opportunities, Kotak Opportunities and Birla Sun Life India Opportunities. Notably, its performance over a one- and three-year period compares favourably with large-cap equity fund averages too.

Portfolio: Despite its flexi-cap positioning, the fund enjoys a predominant large-cap bias only. Large caps (market capitalisation of over Rs 7,500 crore) make up about 80 per cent of its January-12 portfolio.

Having a large-cap biased portfolio seems to have stood the fund in good stead, helping it better manoeuvre the volatile markets of last year.

While for its compact asset size, the fund's number of stock holdings (53 in its January-12 portfolio) seems somewhat high, it hasn't compromised on its diversification.

Its top five stocks make up one-fourth of its portfolio, in line with peers with larger AUMs (assets under management) such as UTI Opportunities and Kotak Opportunities.

Over the last six months, while the fund has largely maintained its exposure to financials, energy and technology sectors, it increased its allocation to pharma, while cutting exposure to the media and entertainment sector.

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