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Mirae Asset India Opp: Outperforms the benchmark convincingly
Wed, Sep 09, 2015
Source : Khyati Shah, Citrus Interactive

Mirae Asset India Opportunities Fund is a large cap equity diversified fund. The fund was launched in April 2008 and is benchmarked against the S&P BSE 200 index. The fund has an AUM of Rs. 1,282 crore as on July 31, 2015 which is gone up by 103 crore as compared to the month of June 30, 2015 (1,179 crore).

Performance:

The fund’s performance across different time horizons is extremely good as seen in the table given below. Since its inception the fund has given outstanding CAGR returns of 18 per cent whereas S&P BSE 200 Index has given CAGR return of only 9 per cent. In the time horizon of YTD, 3 and 5 years it has outperformed its category average and its benchmark but in 1 year time horizon it is lagging marginally as compared to its category average. The outperformance margin vis-à-vis its benchmark is substantially high.

 

YTD

1 Year

3 Years

5 Years

Since Inception

Mirae Asset India Opportunities Fund

9.12

26.4

28.27

17.16

18.11

S&P BSE 200 Index

4.69

14.12

19.29

9.47

9.01

Category Average

8.37

26.63

26.5

14.15

NA

Rank

66/157

69/154

45/145

30/135

NA

 Figures are in % as on July 31, 2015; Returns above 1-year in Compounded Annual Growth Rate

When we look at the calendar year returns it’s quite clear that this fund has beaten its benchmark in each of the last calendar five years. It has beaten the category average in 2010, 2011 and 2013. It has underperformed its category average in 2012 and 2014.

 

2010

2011

2012

2013

2014

Mirae Asset India Opportunities Fund

23.12

-19.64

33.28

8.95

52.86

S&P BSE 200 Index

16.22

-26.95

30.98

4.38

35.47

Category Average

19.54

-24.08

34.08

5.25

54.04

Rank

38/131

23/138

63/142

32/146

63/149

  

Portfolio Characteristics:

Risk: In terms of measures of risk such as Beta (measured over last three years), the fund has taken higher risk compared to the category whereas risk measure for Standard Deviation (measured over last three years) the fund has delivered same return as its category median.

 

Standard Deviation

Beta

Mirae Asset India Opportunities Fund

0.9

0.91

Category Median

0.9

0.87

Risk-adjusted Returns: In terms of measures of risk such as Sharpe (measured over last three years), the fund has taken slightly higher risk compared to the category whereas risk measure for Treynor (measured over last three years) the fund has delivered same return as its category median.

 

Treynor

Sharpe

Mirae Asset India Opportunities Fund

0.1

0.1

Category Median

0.1

0.09



Sector concentration: The concentration of the fund in the top three and five sectors is much higher than the category median whereas for Top 10 sectors the concentration of the fund is marginally low.

 

Top 3

Top 5

Top 10

Mirae Asset India Opportunities Fund

41.1

53.38

69.43

Category Median

36.4

49.66

70.19

Company concentration: The fund is diversified with concentration in top three, five and ten companies in its portfolio is much lower than the category median.

 

Top 3

Top 5

Top 10

Mirae Asset India Opportunities Fund

17.36

25.95

42.83

Category Median

18.62

27.01

43.96

Sector & Company Concentration signifies that the funds maintain a fairly diversified portfolio.

Processes
:

The fund managers are following strategy of Core & Tactical approach which means good stocks are held for a long time (core approach) and stocks are held for short-term to medium-term depending on market conditions (tactical approach). It follows the Early Cycle Investment Pattern which identifies future growth trends at an early stage. It has the flexibility to invest across sectors, market capitalization, themes and investment styles. The investment approach is centered around participating in high quality businesses upto a reasonable price.

Number of equity holdings:  As of July 31, 2015, the fund holds 58 stocks which are higher than the category median of 47 stocks in the diversified equity segment.

The top 5 sectors in the portfolio had an allocation of 53.38% which is higher than the category average of 49.66%. The fund’s exposure to cyclical stocks currently is 66.99% followed by defensives with 15.20% & services with 14.02%. The Top five holding are HDFC Bank Ltd., ICICI Bank Ltd., Larsen & Toubro Ltd., Maruti Suzuki India Ltd. And IndusInd Bank Ltd.

 The fund’s expense ratio is 2.41 per cent which is higher than the category average of 2.36 per cent. The fund has an exit load of 2 per cent on or before 6 months (182 days), 1 per cent after 6 months but on or before 1 year from the date of investment and Nil after 1 year.  Minimum investment required for the fund is Rs. 5,000.

Fund Managers:

The fund managers responsible for the performance of this fund are Neelesh Surana and Sumit Agrawal.

Neelesh Surana is Head of Equity and Sr. Vice President at Mirae Asset Mutual Fund. He is a B.E (Mechinical) and M.B.A (Finance). He has professional experience of more than 14 years and is responsible for Portfolio construction & monitoring. Prior to this assignment, Neelesh was associated with ASK Investment Managers Pvt Ltd where he was responsible for tracking sectors like Metals, FMCG and Pharma. He manages several other funds such as Mirae Asset Emerging Bluechip Fund, Mirae Asset India-China Consumption Fund and Mirae Asset Prudence Fund.

Sumit Agrawal is responsible for Overseas Investments. He is B.Com, CS, PGDM - (Finance). He has professional experience of more than 7 years and his primary responsibility includes Investment Analysis & Fund Management. He has been associated with the AMC as an Investment Analyst since November, 2010. He was previously associated with ENAM Securities and JP Morgan India Services as a Research Analyst.

View:

The fund has a very good long term track record with a fairly diversified portfolio of stocks. The fund has outperformed of its benchmark convincingly in all the calendar years of its existence. It can be considered for the large cap allocation of your portfolio.

 
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