Mirae Asset Emerging Bluechip Fund: Aiming to Grow Wealth with Stability

In the current market environment where the volatility has intensified, Large & Midcap Funds can prove to be resilient compared to riskier categories such as Midcap Funds and Small-cap Funds. Moreover, the category is well-placed to take advantage of a subsequent recovery and create wealth for investors over the long term.

Mirae Asset Emerging Bluechip Fund is the most popular scheme in the Large & Midcap Funds category that has rewarded its investors well, yet without taking unnecessary risk.

Data as on February 15, 2022
(Source: ACE MF)

As far as performances go, Mirae Asset Emerging Bluechip Fund has achieved a commendable track record in a short span of time and successfully delivered superior returns across market cycles. Its outperformance and the ability to generate higher alpha is clearly visible across time periods considered. Mirae Asset Emerging Bluechip Fund's long term track record is exemplary; wherein it has generated compounded annualised alpha of 4 to 6 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 the short term track record of the fund is quite encouraging.

Mirae Asset Emerging Bluechip Fund's volatility (standard deviation) of 22.05% is competitive to its peers and nearly in line with the benchmark, and more than compensates its investors in the form of superior risk-adjusted returns. The Sharpe ratio (0.29) of the fund is commendable and is among the highest in the category.

Investment strategy of Mirae Asset Emerging Bluechip Fund

Mirae Asset Emerging Bluechip Fund was incepted as a mid-cap biased fund that also held a significant allocation to large-cap stocks. Now classified under Large & Midcap Funds category, the fund is mandated to invest 35% to 65% of its assets in stocks of mid-cap companies (that are not part of the top 100 stocks but fall within top 250 stocks as per market capitalization at the time of investment). In addition, it also invests 35%-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 combination of the top-down and bottom-up approaches to investing, the fund management broadly analyses the macro economy and invest in stocks of high-growth companies likely to benefit from macroeconomic, sectoral, and industry trends. The fund manager identifies long-term investment opportunities in stocks of high quality businesses that are available at reasonable prices and follows a buy-and-hold investment strategy until its full potential is derived. Notably, the turnover ratio of the fund has ranged between 70%-95%.

As of January 31, 2022, Mirae Asset Emerging Bluechip Fund held 69 stocks in its portfolio spread across market capitalization, with prominent large-cap names, such as ICICI Bank, HDFC Bank, Infosys, Axis Bank, SBI, appearing among its top holdings. Notably, 4 out of its top 5 holdings are bank stocks. The top 10 stocks in the portfolio combined, accounts for around 38.4% 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 26 stocks with an exposure of less than 1% in each stock.

ICICI Bank, Indian Energy Exchange, SBI, Infosys have been the major gainers in the portfolio together contributing over 10% to its returns in the last one year. It also benefitted from its holdings in SKF India, Cholamandalam Investment and Finance, Bharti Airtel, Bharat Electronics, among others that turned out be the major gainers in the portfolio.

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 Mirae Asset Emerging Bluechip Fund's portfolio with an allocation of 20.3%, while Finance stocks account for another 11.3% in the portfolio. Infotech, Auto & Auto Ancillaries, Pharmaceuticals, Engineering, Consumption, and Consumer Durables are among the top sectors in the portfolio. The fund's portfolio appears well positioned to ride the market highs and lows.

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 mid-cap as well as large-cap segment. It aims to invest 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 take 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 it to perform consistently across market cycles, while keeping the overall risk low. Mirae Asset Emerging Bluechip Fund has an experienced fund manager, Mr Neelesh Surana, at helm since inception. He has been successful in steering the fund out of rough market situations.

The aggressive investment mandate along with higher allocation to mid and small-caps makes Mirae Asset Emerging Bluechip Fund suitable for investors having higher risk appetite and looking to gradually invest (via SIP) in a reliable fund capable of creating superior wealth for its investors.

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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