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I have been investing in Mirae Asset Emerging Bluechip Fund via SIPs for the past 16 months, and my time horizon is around five years. The fund has given returns of only 8-9 per cent in the past one year. What should I do now as many other funds in the same category have managed to provide 13-14 per cent returns in the same time period?

Vinoth Kumar

The returns you have mentioned have been for lump-sum investments. While Mirae Emerging Bluechip has been an outstanding performer over longer time periods, it is true that it has lost a bit of its sheen in the past one year. The fund sports a compounded annual return of 29 and 18 per cent over the last five- and three-year periods, respectively, placing it among the top performers in both these time-frames in the mid-cap funds category.

But its 10 per cent return in the past one year places it behind several funds such as ICICI Prudential MidCap, L&T Midcap and HDFC Mid-Cap Opportunities. SIP investments in the Mirae Emerging Bluechip have lost about 3.37 per cent in the last year, while some of the peers mentioned above have managed to hold their head above water.

As valuations of mid- and small-caps soared, the fund took a somewhat cautious approach by bringing down its heightened exposure to the segment over the past year. But many of these stocks continued to do well for most part of that period. This could be one of the reasons for the fund’s short-term underperformance.

Besides, under market regulator SEBI’s new classification norms, Mirae Emerging Bluechip has become a large- and mid-cap fund from mid-March 2018 onwards (see The Big Story, page 2).

Due to this change, comparing Mirae Emerging Bluechip with other pure mid-cap funds may not be appropriate henceforth. On your part, you should take a call on the type of fund you want to invest in. If you are looking for a pure mid-cap fund, you must move to one of them. But you must understand that mid-cap stocks have been correcting after moving up sharply in the past two-three years, and this trend may continue. Hence, if you have a high-risk appetite, you can move to a pure mid-cap fund. Else, you can continue with Mirae Emerging Bluechip for some more time, and monitor its performance.

From your question, it is not clear whether this is your only investment. It is always better to diversify to bring down risk.

I am planning to start an SIP of ₹1,500 in Motilal Oswal Multicap 35 Fund. I am planning to continue it for 10 years. Please advise whether my decision is right.

Koshy Mathew

Started in early 2014, Motilal Oswal Multicap 35 has been around for less than five years. While this is not a long enough track record, its performance in this period has been noteworthy. The fund has boasted a three-year SIP return of 16. 2 per cent in the past three years, and is among the toppers in the multi-cap category. While there has been a slight change in its name following SEBI’s classification norms, the fund’s characteristics remain the same. You can go ahead with the investment if you have a moderate- to high-risk appetite. However, do regularly monitor the performance.

Send your queries to mf@thehindu.co.in

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