Given the uncertainty over earnings growth, one factor which retail investors need to focus on in the present market conditions is quality. This needs to encompass not only earnings growth, but also management and key financial ratios. Among the large-cap schemes, which have high focus on quality of companies, Mirae Asset India Opportunities Fund has distinguished itself by performing consistently well by sticking to its investment mandate.
The fund house focuses on two key principles: One, buying companies which have high return on capital employed and have generated consistent and incremental cashflows. Two, 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.
While investing in them, the scheme’s fund manager Neelesh Surana has been extremely careful about their valuations. The fund is being additionally managed by Harshad Borawake.
The fund managers have bought in companies which reflect two themes. One, companies which are under-performers and are attractive on the parameter of valuation. Second, these companies represent diversified themes. In the past three-year and five-year periods, the scheme has given 15 per cent and 20 per cent returns respectively, while its benchmark BSE 200 has delivered 10 per cent and 13.6 per cent returns respectively over the same periods.
