Investing in equity mutual funds requires an appetite for risk and patience to wait for a longer duration. Equity investment is not for short-term return, it is meant to provide a handsome return after a period. Mirae asset emerging bluechip is one of the top mutual fund schemes in the large and midcap category of funds. It has been providing significant returns over the past years. To understand this fund’s performance, let’s understand the emerging bluechip companies in which this fund invests.
What is an emerging bluechip company?
You must have heard the term bluechip companies and the emerging bluechip companies are nothing but the companies which have the potential to turn into bluechip companies. These companies are growing companies and thus offer great returns. Once an entity becomes a brand, recognized as a bluechip company, the growth of such companies becomes stagnant or slow. However, when the entity is striving to reach and earn that tag of a bluechip company, it is when the growth is happening. Thus, investing in this company can help the investors accumulate a good amount of wealth over time.
Constituents and formation of Mirae asset emerging bluechip fund
The Mirae Asset Mutual Fund offers Mirae asset emerging bluechip fund which is constituted of 35% to 65% or more of large-cap equities and the remaining AUM is invested in midcap companies. By large-cap companies, it means the top 100 companies as per market capitalization and the mid-can are the next 150 companies as per market capitalization.
The top sectors that this fund invests in are financial services, consumer cyclical, and basic materials. In financial services, more than 32% of the AUM is invested and in consumer cyclical, it is 13% and 10.9% in basic materials. These are the top three sectors where the fund has been investing most of its money.
ICICI Bank Ltd has the highest AUM invested in it which is 6.1%, followed by HDFC Bank Ltd., and then there is Infosys Ltd. As you can see, all these stocks are of well-reputed companies having huge brand value and which are already considered bluechip companies or about to get the tag of bluechip companies.
Who are the fund managers and how do they approach this fund?
The Mirae asset emerging blue-chip fund is managed by Fund Managers – Neelesh Surana and Ankit Jain. They are two of the brightest fund managers of Mirae Asset Mutual Fund with extensive experience in investments and managing funds.
The fund managers have a bottom-up approach to researching and investing in this fund. They invest in companies that have huge potential for growth and becoming future bluechip companies. However, the approach also includes investing in this high-potential business until the price of their stocks is within a reasonable range and not too expensive as the value investing method is also followed for investing in this fund. The fund tracks the Nifty Large Midcap 250 (TRI) as the benchmark index.
For how long, you should stay invested in Mirae asset emerging blue-chip fund?
When you invest in an equity fund, you should keep in mind that the tenure for investment is going to be long. Since Mirae asset emerging bluechip fund invests both in large-cap and mid-cap companies, the ideal span for staying invested in this fund is around three years and more. If you have investment goals for less than three years, then this fund may not serve the purpose.
Track record of the fund
The return of this fund since inception is 21.73% which is one of the highest in the segment. The category’s average return is 12.14% while the fund’s average return is 15.36%. If you check the 5-year return, then it is around 13.58% while the 3-year return is 16.85%.
In recent times, the return of the fund has been decreasing a bit, probably due to market turmoil and geological issues, however, as this fund is for long-term investment, short-term returns hardly should bother the investors.
What is the expense ratio of the fund?
The expense ratio of the regular plan is 1.69% while for the direct plan it is 0.70%. If you compare the expense ratio, then it might seem a bit higher than its peers.
Who should invest in this Mirae asset emerging blue-chip fund?
If you are looking to invest for more than 3 years at the least and looking for wealth creation, then Mirae Asset emerging bluechip fund can be one of the best choices for your portfolio.
This fund helps in wealth accumulation as it invests in companies that are well-established and still growing, so the risk is comparatively lower due to the large-cap stocks, and the return potential is high due to the mid-cap stocks and the companies which are going to bluechip companies soon.
Mirae Asset emerging bluechip fund can be a good option for long-term investors looking for wealth accumulation without taking a very high risk. The mix of large midcap stocks in this fund is ideal for these investors.