Large Cap Mutual Funds: Understanding Performance and Strategy
Large-cap mutual funds are considered more secure, but Mirae Asset Large Cap has underperformed due to its disciplined investment strategy, focusing on strong growth sectors like infrastructure and real estate.
Large Cap Mutual FundsMirae AssetInvestment StrategyEquity Mutual FundsIndiaReal Estate NewsJul 06, 2024
The fund's growth-focused investment strategy, which previously generated strong returns, has been less effective in the current market favoring value stocks over growth stocks. As a result, the fund has significantly underperformed since 2022, contrasting with its solid long-term track record.
The fund's Head of Equity, Gaurav Misra, attributes the underperformance to the fund's disciplined investment strategy, which refrains from investing in stocks with valuations surpassing their fundamentals. This conservative approach led to the fund missing out on the recent rally in sectors like capital goods and defense.
To generate alpha, Misra believes in selecting stocks with strong overweights, blending quality, structural growth opportunities, and deep value, cyclical, and special situation plays. Peer comparison reveals that Mirae Asset Large Cap Fund has underperformed its peers, including ICICI Prudential Bluechip Fund, Canara Robeco Bluechip Equity Fund, Baroda BNP Paribas Large Cap Fund, and Edelweiss Large Cap Fund.
Mirae Asset Investment Managers (India) is a leading asset management company in India, offering a range of equity and fixed income mutual funds.
Information The Indian mutual fund industry has grown significantly in recent years, with large-cap funds remaining a popular choice for investors. Understanding the performance and strategy of large-cap funds is crucial for investors to make informed investment decisions.
Frequently Asked Questions
What is the new threshold for large-cap companies in India?
The new threshold for large-cap companies in India is Rs 84,300 crore, as announced by the Association of Mutual Funds in India (AMFI).
Why has Mirae Asset Large Cap mutual fund underperformed in recent years?
The fund's disciplined investment strategy, which refrains from investing in stocks with valuations surpassing their fundamentals, has led to underperformance in the current market favoring value stocks over growth stocks.
What is the fund's approach to generating alpha?
The fund's approach to generating alpha involves selecting stocks with strong overweights, blending quality, structural growth opportunities, and deep value, cyclical, and special situation plays.
How does Mirae Asset Large Cap Fund compare to its peers?
Peer comparison reveals that Mirae Asset Large Cap Fund has underperformed its peers, including ICICI Prudential Bluechip Fund, Canara Robeco Bluechip Equity Fund, Baroda BNP Paribas Large Cap Fund, and Edelweiss Large Cap Fund.
What is the importance of understanding large-cap mutual fund performance and strategy?
Understanding the performance and strategy of large-cap mutual funds is crucial for investors to make informed investment decisions and align their investments with their financial objectives and risk tolerance.
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