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Mirae Asset Large Cap Fund: Fund review

The scheme tops the list of best performing large-cap schemes for the past three-year and five-year periods, delivering returns of 18% and 20% respectively.

, ET Bureau|
Updated: May 07, 2019, 09.36 AM IST
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For the past two quarters, the financial performance of large-sized companies has largely met the Street’s earnings estimates. This trend has transpired after over three years of underperformance. Given the current climate of high uncertainty of earnings’ growth, it looks that large-sized companies are delivering a considerable degree of performance when compared with mid-and-small-sized counterparts.

Given this fact, investors may consider enhancing their exposure to large-sized companies. Investors willing to park fresh money in equities should consider higher exposure to large-cap oriented schemes. These schemes do relatively well given the strengths of the companies in their portfolio that are characterised by superior balance sheets, return ratios, operations and geographical presence. Among the large-cap schemes, Mirae Large Cap Fund has shown distinct performance by beating its peers by a reasonably good margin.

A key idea which the scheme’s managers Neelesh Surana, Harshad Borawake and Gaurav Misra have been following is quality in almost all important variables. This includes management, return ratios, cash flows, working capital cycle and debt. This is one of the reasons why they maintain high exposure to private sector banks as they are aiding consumer discretionary growth at a time of volatility in corporate earnings growth.

That the approach has paid off is evident in the fact that the scheme tops the list of best performing large-cap schemes for the past three-year and five-year periods, delivering returns of 18% and 20% respectively, while the average returns of its peers in the category has been 13% and 14%, respectively.

Portfolio change (past 6 months)
New entrants Complete exits Increase in allocation
Ajanta Pharma Ceat Sun Pharmaceutical
Balkrishna Indus Adani Ports & SEZ Exide Industries
Coal India Ashok Leyland Hindustan Unilever

Returns (in %)
Period CAGR return SIP CAGR return Large cap Fund- AVG CAGR return
1 year 8.96 13.83 3.10
3 year 17.43 13.64 12.60
5 year 17.97 14.57 13.02

Returns peer comparison (in %)
Scheme name 1-year 3-yer 5-year
Mirae Asset Large Cap Fund 8.96 17.43 17.97
ICICI Prudential Bluechip Fund 5.98 14.8 14.38
JM Core 11 Fund 4.92 18.4 16.63
Source: Accord Fintech, Compiled by ETIG Database

Expert Take
Rupesh Bhansali, head-mutual funds, GEPL Capital
The scheme’s fund managers stay away from momentum stocks. They select quality stocks based on core fund house philosophy of cash flows, dominant market share and strong return ratios. Since the scheme is invested in sector leaders which have been doing well in the past two quarters, I think it is likely to maintain its outperformance in the long term, too.

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