Volatility has clearly dug in its heels in equity markets this year, and therefore, mutual fund investors in pursuit of good returns need to stay with schemes that invest in quality companies that have performed well in the past few quarters. This quality factor needs to encompass not just earnings growth but also management credibility and other key financial parameters.
Among large-cap schemes that focus on quality of companies, Mirae Asset India Opportunities has distinguished itself by performing consistently well by sticking to its investment mandate. In the past three- and five-year periods, the scheme has given 11 per cent and 21 per cent returns, respectively, while its benchmark, BSE 200, has given 8 per cent and 15 per cent returns in three year and five year periods, respectively.
The fund focuses on two key principles. One, buying companies which not only have a high return on capital employed and have generated consistent and incremental cash flows. Two, picking companies at attractive valuations. These factors have played crucial role in the scheme’s outperformance. It has been largely observed that the scheme has 5-10 per cent higher exposure to large-sized companies than its peers. In buying large-sized companies, the scheme’s fund manager, Neelesh Surana, chooses companies keeping their valuations in mind. The fund, co-managed by Harshad Borawake, has favoured consumption stocks, such as Marico, ITC, Dabur, Asian Paints and Hindustan Unilever.
Should I continue with Mirae Asset India Equity Fund?
