15 June 2015

Mirae Asset India Opportunities Fund: Conservative but consistent: Business Line

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Large-caps give it stability while the mid-caps in its portfolio spice up returns
If you think the volatility in the stock market isn’t likely to settle down for now and would like to shield your portfolio, here’s one fund that fits the bill.
Mirae Asset India Opportunities not only has a good track record of containing downsides during market falls but can also deliver healthy returns over the long term. The fund is suitable for investors with a moderate risk appetite and a three-to-five-year horizon.
Over the longer periods of three and five years, Mirae India Opportunities ranks in the top quartile of funds in its category.
It scores over peers in the multi-cap category on consistency. Since its inception in April 2008, the fund's returns have been above its benchmark, the BSE 200 Index, almost all the time on a rolling return basis. Across time-frames, the fund has bettered its benchmark by a margin of 7 to 11 percentage points.

Though it is a multi-cap fund by mandate, it tends to maintain a higher large-cap (stocks with a market capitalisation of over ₹10,000 crore) slant.
This is partly why the fund has slipped down the rankings in the one-year period, since chart toppers such as L&T India Value fund held higher levels of mid-cap and small-cap stocks.
The strategy has also helped the Mirae India Opportunities fund contain downside better than its benchmark during the corrective phases. For instance, during the 2010-11 market fall, the scheme fell less than 22 per cent, against the nearly 30 per cent slide of the BSE 200 Index. Investing over two-thirds of its assets in large-cap stocks and increasing exposure to less volatile themes such as IT and consumer goods helped the fund outdo its benchmark in this period. But during rallying markets, the fund put its multi-cap mandate to good use, with high conviction bets in the small and mid-cap space spicing up returns.
For instance, the fund’s NAV almost doubled since the August 2013 low compared to the 70 per cent gain of the BSE 200. Adding multi-bagger stocks such as Vinati Organics, Eicher Motors, HSIL, Prism Cement and Natco Pharma to the portfolio provided a leg-up to returns over the last year and a half.
In the last six months, the scheme has increased exposure to stocks in cyclical themes, such as financials, construction projects, cement and industrial capital goods. The scheme held 56 stocks in its kitty as of April.

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