Strict Focus on Quality Pays Off
Mirae Asset Emerging Bluechip Fund
Post the Budget, which had no big surprises, it is time for investors to look at quality companies, which have not disappointed investors, to a large extent, in terms of financial performance and return ratios. One such scheme is Mirae Asset Emerging Bluechip Fund.
It is one of the few schemes in which the fund manager has unwavering focus on quality of companies. The scheme’s fund manager stays away from momentum stocks, which in the short term may boost returns, but in the long term may prove to be unprofitable. The scheme’s fund manager Neelesh Surana selects a stock only when three main parameters are met — quality of earnings, products and presence in the industry in which it operates; management (corporate governance); and valuations. The fund invests 25-30% of its portfolio in Top 100 companies by market capitalisation.
Due to focus on quality stocks, it has beaten its category funds by a considerable margin. In the past three-year and five-year periods, the scheme has given 38.4% and 29% returns, respectively, while its benchmark index Nifty Free Float Midcap 100 has given 29% and 17%, respectively, in the same periods.
In the past six months, the scheme has invested in companies, which had corrected in recent times, but have good return ratios. The scheme has invested across themes. A few prominent names are GAIL, Amara Raja Batteries, Tata Global Beverages and Bharat Financial Inclusion. Adani Ports and SEZ Complete Exits The fund has been managed by the same fund manager since its launch, which gives consistency and coherence in the way it is managed. It maintains a healthy mix of midcap to large cap companies, roughly at 2:1. It is not very volatile and it generates much higher returns, as compared to the quantum of risk it takes in the scheme.
New Entrants Increase in Allocation