A common thing in recent post-earnings conference calls of leading companies is the expectation of double-digit volume growth for the next two to three years. Therefore, it will be profitable for investors to spot such companies at the right time and stay invested with them. One mutual fund scheme, which favours such companies after careful examination of return ratios, is Mirae Asset India Equity Fund.
The fund has performed consistently well by sticking to its investment mandate. In the past three- and five-year periods, the scheme has given 13 per cent and 20 per cent returns, respectively, while its benchmark, BSE 200, gave 9 per cent and 13 per cent returns.
The scheme follows two key principles: one, buying companies with high return on capital employed, and have generated consistent and incremental cash flows; and two, attractive valuations. These factors have played a 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, always associates a lot of importance to the companies’ valuations. In the past six months, the scheme, co-managed by Harshad Borawake, has invested in companies which are value picks, such as Bharat Electronics, Cipla, Marico, and United Phosphorous.
Should I continue with Mirae Asset India Equity Fund?
