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

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.

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

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.

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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.

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

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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.

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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.

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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;

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10. Primary Real Estate Advisors Private Limited;

11. HYNGO India Private Limited;

12. Suresh Lulla;

13. I V Subramaniam.

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;

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