Mirae Asset Emerging Bluechip Fund: Participating in the Growth of Emerging Companies

Aug 11, 2022

Listen to Mirae Asset Emerging Bluechip Fund: Participating in the Growth of Emerging Companies

00:00 00:00


The equity market has rebounded in the past one and a half months and is nearing its previous highs. However, due to the uncertain nature of the economic environment, some pullback may be imminent. Thus, it is advisable to have exposure across market caps so you can benefit from the diversification. Large and Mid-Cap Funds are a separate set of multi-cap strategy that offers investors an opportunity to diversify their investment across stocks of large and mid-sized companies.

Large-cap stocks are known to provide steady returns, while mid-cap stocks have the potential to generate high returns. A combination of these stocks in the portfolio can help you to earn optimal risk-adjusted returns.

Mirae Asset Emerging Bluechip Fund is the most popular scheme in the Large & Midcap Fund category that has recorded superior long-term growth without taking unnecessary risks.

Graph 1: Growth of Rs 10,000 if invested in Mirae Asset Emerging Bluechip Fund 5 years ago

Mirae Asset Emerging Bluechip Fund is the largest and most popular scheme in the Large & Midcap fund category. The fund looks to combine the stability of large-caps along with the growth of select emerging mid-sized companies which have the potential to become the future bluechips. Mirae Asset Emerging Bluechip Fund is known for its prudent investment approach that has helped it deliver superior risk-adjusted returns to its investors. Since its inception in July 2010, Mirae Asset Emerging Bluechip Fund has not only managed to deliver robust returns in the bull phases but also considerably restricted losses in the bear phases. The fund’s commendable performance has helped it gain popularity among investors, resulting in a massive growth in AUM. Notably, in order to put a check on capacity, the fund house has suspended lump sum investments in the scheme since October 2016 (when its corpus was around Rs 3,000 crore) and has currently restricted fresh registrations via SIP to Rs 2,500 per month. Over the last 5-year period, Mirae Asset Emerging Bluechip Fund outperformed the benchmark by nearly 3 percentage points in compounded returns. An investment of Rs 10,000 in Mirae Asset Emerging Bluechip Fund would have now more than doubled to Rs 21,191 as compared to Rs 18,929 for a simultaneous investment in its benchmark.

Graph 1
Past performance is not an indicator of future returns
Data as on August 09, 2022
(Source: ACE MF)
 

Table: Mirae Asset Emerging Bluechip Fund's performance vis-á-vis category peers

Scheme Name Corpus (Cr.) 1 Year 2 Year 3 Year 5 Year 7 Year Std Dev Sharpe
Quant Large & Mid Cap Fund 155 15.22 31.68 27.42 14.46 15.46 22.95 0.25
Axis Growth Opp Fund 7,071 7.02 32.19 25.72 -- -- 21.44 0.24
Mirae Asset Emerging Bluechip Fund 20,664 4.65 31.99 24.35 16.20 17.79 23.05 0.23
Canara Rob Emerg Equities Fund 12,769 7.56 30.87 24.34 14.38 15.18 22.34 0.23
ICICI Pru Large & Mid Cap Fund 4,973 15.71 37.51 22.73 13.29 13.78 24.07 0.21
Edelweiss Large & Mid Cap Fund 1,270 7.71 30.99 22.70 15.06 13.53 21.84 0.22
HDFC Large and Mid Cap Fund 5,817 12.51 36.34 22.45 12.73 11.06 25.11 0.19
SBI Large & Midcap Fund 6,394 9.98 34.40 22.36 14.26 13.08 23.65 0.20
Kotak Equity Opp Fund 9,223 8.50 29.27 21.88 13.51 13.85 22.09 0.21
Bank of India Large & Mid Cap Equity Fund 182 4.21 28.12 21.38 11.28 11.09 21.59 0.20
NIFTY LargeMidcap 250 - TRI 9.68 32.50 22.71 13.60 13.63 23.82 0.20
Returns are point to point and in %, calculated using the Direct Plan-Growth option. Those depicted over 1-Yr are compounded annualised.
Data as on August 09, 2022
(Source: ACE MF)
*Please note, this table only represents the best performing funds based solely on past returns and is NOT a recommendation. Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully. Past performance is not an indicator for future returns. The percentage returns shown are only for indicative purposes.
 

Mirae Asset Emerging Bluechip Fund is a Large & Midcap Fund that has constantly made it to the list of top quartile performers over longer time frames. The fund has showcased its ability to generate significant alpha for its investors on multiple occasions in the past. Mirae Asset Emerging Bluechip Fund's long-term track record is exemplary wherein it has generated compounded annualised alpha of 3 to 4 percentage points over its benchmark Nifty LargeMidcap 250 - TRI. At the same time, it has outpaced most of its peers by a distinct margin. Even though the fund has trailed the benchmark and the category average in the last 1-year, it has the potential to bounce back strongly.

Mirae Asset Emerging Bluechip Fund's volatility (standard deviation) of 23.05% is competitive to its peers and slightly lower than the benchmark. It has more than compensated its investors in the form of superior risk-adjusted returns. The Sharpe ratio (0.23) of the fund is commendable and figures among the highest in the category.

Mirae Asset Emerging Bluechip Fund: Participating in the Growth of Emerging Companies
Image source: www.freepik.com - photo created by freepik
 

Join Now: PersonalFN is now on Telegram. Join FREE Today to get 'Daily Wealth Letter' and Exclusive Updates on Mutual Funds

Investment strategy of Mirae Asset Emerging Bluechip Fund

Classified under Large & Midcap Fund category, Mirae Asset Emerging Bluechip Fund is mandated to invest 35% to 65% of its assets in stocks of Mid-cap companies (which are not part of the top 100 stocks but fall within top 250 stocks by market capitalization at the time of investment). Simultaneously, the fund holds 35% to 65% of its assets in stocks of Large-cap companies (top 100 stocks by market capitalization at the time of investment).

While picking stocks for the portfolio, Mirae Asset Emerging Bluechip Fund aims to hold a well-diversified portfolio without having any bias towards any particular theme, sector or style. Following a mix of the top-down and bottom-up approach to investing, the fund management broadly analyses the macroeconomy and invests in stocks of high-growth companies likely to benefit from the macroeconomic, sectoral, and industry trends. The fund managers look for long-term investment opportunities in stocks of high-quality businesses that are available at reasonable prices and follow a buy-and-hold investment strategy until its full potential is derived. Notably, the turnover ratio of the fund has ranged between 65% to 80% in the last one year.

Graph 2: Top portfolio holdings in Mirae Asset Emerging Bluechip Fund

Graph 2 Graph 2
Holding in (%) as of June 30, 2022
(Source: ACE MF)
 

As of June 30, 2022, Mirae Asset Emerging Bluechip Fund held a well-diversified portfolio of around 69 stocks spread across market capitalization, with prominent large-cap names like HDFC Bank, ICICI Bank, Infosys, Axis Bank, and SBI appearing among its top holdings. Notably, 4 out of its top 5 holdings are bank stocks. The top 10 stocks in the portfolio together accounted for nearly 37% of the total assets. Some of its top stocks have been in the portfolio for well over 2 years now. The fund currently holds a long tail of around 25 stocks with an exposure of less than 1% in each stock.

In the last one year, Mirae Asset Emerging Bluechip Fund benefitted from its holdings in Bharti Airtel, ICICI Bank, SKF India, TVS Motor Company, among others, while its holdings in Natco Pharma, Gujarat State Petronet, Axis Bank, JK Cement, Tata Steel, etc. eroded some of its gains.

While Mirae Asset Emerging Bluechip Fund's portfolio is skewed towards cyclicals, it is fairly spread across defensive and sensitive sectors as well. Banks dominate its portfolio with an allocation of 18.5% while Finance stocks account for another 11.7% in the portfolio. The presence of Infotech, Pharmaceuticals, and Consumption, among the top sectors indicates that the fund managers have kept a balanced portfolio with a defensive outlook, given the high market volatility. Auto & Auto Ancillaries, Engineering, Petroleum, Chemicals, Consumer Durables, and Cement are among the other core sectors in the fund's portfolio.

 

Suitability

Mirae Asset Emerging Bluechip Fund is a process-driven fund and has been agile enough to take advantage of various investment opportunities present in the large-cap as well as mid-cap segments. It aims to invest primarily in growth-oriented stocks while simultaneously keeping an eye on valuations.

The fund adopts a well-balanced approach to investing. It does not resort to taking aggressive calls, but maintains a diversified portfolio of quality stocks that are expected to benefit from macroeconomic, industry, and sectoral trends, and holds them with a long-term view. This strategy of the fund house has enabled the fund to perform consistently across market cycles, while keeping the overall risk at reasonable levels.

The aggressive investment mandate along with higher allocation to mid and small-caps makes Mirae Asset Emerging Bluechip Fund suitable for investors having a higher risk appetite and looking to gradually invest (via SIP) with a long-term view of at least 5 to 7 years.

 

Warm Regards,
Divya Grover
Research Analyst

 

PS: If you are looking for quality mutual fund schemes (including Equity-linked Saving Schemes) to add to your investment portfolio, I suggest you subscribe to PersonalFN's premium research service, FundSelect. PersonalFN's FundSelect service provides insightful and practical guidance on which mutual fund schemes to Buy, Hold, and Sell.

Currently, with the subscription to FundSelect, you could also get Free Bonus access to PersonalFN's Debt Fund recommendation service   DebtSelect.

If you are serious about investing in a rewarding mutual fund scheme, subscribe now!

Note: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

 

DISCLOSURE AS PER SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014

About the Company including business activity

Quantum Information Services Private Limited (QIS) was incorporated on December 19, 1989.

QIS was promoted by Mr Ajit Dayal with an objective of providing value-based information/views on news related to equity markets, the economy in general, sector analysis, budget review and various personal products and investments options available to the Public. It was the first company to start equity research on an institutional level.

'PersonalFN' is a service brand of QIS and was started in the year 1999. In 1999, the Company registered the Domain name www.personalfn.com for providing information on mutual funds and personal financial planning, financial markets in general, etc. and services related to financial planning and research in various financial instruments including mutual funds, insurance and fixed income products to customers. It offers asset allocation and researched investment recommendations through its financial planning services.

Quantum Information Services Private Limited (QIS) is registered as Investment Adviser under SEBI (Investment Adviser) Regulations, 2013 and having Registration No.: INA000000680. In terms of the second proviso to Regulation 3 (1) of SEBI (Research Analysts) Regulations, 2014 the Company is not required to obtain Certificate of registration from SEBI.

Disciplinary history

There are no outstanding litigations against the Company, its subsidiaries and its Directors.

Terms and condition on which its offer research report

For the terms and condition for research report click here.

Details of associates

  1. Money Simplified Services Private Limited;

  2. PersonalFN Insurance Services India Private Limited;

  3. Equitymaster Agora Research Private Limited;

  4. Common Sense Living Private Limited;

  5. Quantum Advisors Private Limited;

  6. Quantum Asset Management Company Private Limited;

  7. HelpYourNGO.com India Private Limited;

  8. HelpYourNGO Foundation;

  9. Natural Streets for Performing Arts Foundation;

  10. Primary Real Estate Advisors Private Limited;

  11. HYNGO India Private Limited;

  12. Suresh Lulla;

  13. I V Subramaniam.

Disclosure with regard to ownership and material conflicts of interest
  1. ‘subject company’ is a scheme on which a buy/sell/hold view or target price is given/changed in this Research Report;

  2. Neither QIS, it's Associates, Research Analyst or his/her relative have any financial interest in the subject Company; except for some of the Research Analysts holding units of Mirae Asset Emerging Bluechip Fund;

  3. Neither QIS, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report;

  4. Neither QIS, it's Associates, Research Analyst or his/her relative has any other material conflict of interest at the time of publication of the research report except that QIS (PersonalFN) is, as per SEBI (Mutual Funds) Regulations 1996, an associate / group Company of Quantum Asset Management Company Private Limited and Trustees and Sponsor of Quantum Mutual Fund (QMF) and to that extent there may be conflict of interest while recommending any schemes of QMF. However, any such recommendation or reference made is based on the standard evaluation and selection process, which applies uniformly for all Mutual Fund Schemes. The payment of commission (upfront / annualized & trail), if any, for any Schemes by QMF to QIS (PersonalFN) is also at arm's length and as per prevailing market practices.

Disclosure with regard to receipt of Compensation
 
  1. Neither QIS nor it's Associates have received any compensation from the subject Company in the past twelve months;

  2. Neither QIS nor it's Associates have managed or co-managed public offering of securities for the subject Company;

  3. Neither QIS nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject Company;

  4. Neither QIS nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.

  5. Neither QIS nor it's Associates have received any compensation or other benefits from the subject Company or third party in connection with the research report

General disclosure
  1. The Research Analyst has not served as an officer, director or employee of the subject Company.

  2. QIS or the Research Analyst has not been engaged in market making activity for the subject Company.

Click here to read PersonalFN's Mutual Fund Rating Methodology

Subject Company means Mutual Fund Schemes

Quantum Information Services Private Limited CIN: U65990MH1989PTC054667 Regd. & Corp. Office: 103, Regent Chambers, 1st Floor, Nariman Point, Mumbai - 400 021

Email:info@personalfn.com Website: www.personalfn.com Tel.: 022 61361200 Fax.: 022 61361222 SEBI-registered Investment Adviser. Registration No. INA000000680, SEBI (Investment Advisers) Regulation, 2013



Add Comments