Mirae India Opportunities Fund - Buy :: Business Line

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The fund has outperformed despite a defensive tilt

The expectation of an early economic recovery has propelled the country’s bellwether indices, the Sensex and Nifty, to new highs.

Investing in a quality multi-cap fund that can adeptly juggle between large- and mid-cap stocks while maintaining a reasonable balance, can help you tide over turbulent market conditions. Mirae India Opportunities Fund is one fund you can consider. If you have a three- to five-year horizon, systematic investment can be considered in this fund.

Being a go-anywhere fund, Mirae India Opportunities has the flexibility to switch allocations across market caps.

This has helped the fund contain downsides during market falls. For instance, during the November 2010-December 2011 correction, even as the BSE 200 Index and Nifty Index declined over 30 per cent and 26 per cent, the fund managed to curb its NAV fall to 22 per cent. At the same time, it has managed to make the best out of rally phases too.

The fund’s returns have been higher than its benchmark, the BSE 200 Index, during the four rally phases since its inception in April 2008.

From the August 2013 lows to now, the fund’s NAV has grown 84 per cent, higher than the 58 per cent and 62 per cent gain for the BSE 200 and Nifty, respectively.

Despite being fully invested during the January-August 2013 correction, the fall in Mirae India Opportunities’ NAV was restricted to 14 per cent, while the BSE 200 Index lost over 15 per cent during this period.

Staying overweight in defensive themes such as IT, pharma and consumer goods clearly helped the fund sail through tough times.

Delivering consistently

The fund scores high on consistency. In the last five years, it has done better than its benchmark 98 per cent of the time. Had you made systematic monthly investments in the fund over the last five years, you would have earned annual returns in excess of 21 per cent. In the last six months, the fund has been increasing its exposure to industrial cyclical themes such as financials, industrials and cement, possibly in expectation of an economic recovery.

It has also added stocks in the consumer cyclicals space, such as automobiles and consumer durables, which will benefit from a pick-up in discretionary spending. Yet, almost 30 per cent of its assets are invested in IT, pharma and consumer goods.

A diversified portfolio comprising 69 stocks (as of September) reduces concentration risk. Likewise, the fund’s large-cap slant with a weighted average market capitalisation of over ₹1 lakh crore should keep the fund sturdy during volatile phases.