Review of Mirae Asset Focused Fund Direct-Growth

Basic Details of the Fund:

Mirae Asset Focussed Fund (MAF) has an AUM of Rs. 8,696 Cr since its inception in May 2019. Mr. Gaurav Misra has been managing the fund since its inception. S&P BSE 500 TRI is the benchmark of MAF. The Expense ratio of the MAF Direct Fund is decent at 0.50%, and the current NAV of the fund is INR. 19.86. The exit load of the fund is 1% if withdrawn before one year, and after 1 year, the exit load is Nil.

Minimum Investment Details:

The Minimum initial lump sum amount to be invested in the fund is Rs.5,000/. The minimum additional purchase amount is Rs. 1000/-. The minimum SIP Amount is Rs.1,000/-

About Focussed Funds:

A Focussed Fund is a portfolio of a limited number of stocks, mostly ranging between 20 to 30. The focussed funds offer an opportunity for a retail investor to invest in a concentrated yet diversified portfolio managed by professional fund managers to generate higher ‘Alpha.’

Market caps, Stocks, and Sectors:

Moderate stocks concentration; Low Turnover Ratio; Decent exposure to mid-cap stocks

The current number of stocks in the MAF is 31. The fund has a turnover ratio of 33%, indicating a low churning and stable holding of the investments.

The top 5 stocks in the portfolio of MAF constitute 36% of the total portfolio holdings, and the top 10 stocks allocation in the portfolio is about 54%. The remaining 46% allocation is spread across the rest of the 21 stocks in the portfolio.

The moderate asset allocation to the top 10 constituents of the portfolio leads to less dependency on the performance of top stocks for the fund to deliver decent returns.

Exposure to mid-cap stocks in the portfolio is at 34.67%. This exposure to mid-cap stocks allows the fund to capture a good quantum of returns during the uptrends of the markets. However, increased volatility is also expected due to the same.

Stocks & Sectors

The top 10 Stocks and sectors are as follows:

Fund Performance & Risk Profile:

Higher Volatility than the Index and Satisfactory Risk-Return Ratios:

As shown above, the fund’s 3-year returns are good at 23.09%, while the index delivered 18.38% for the same period. Though the returns during the 1-year timeframe cannot beat its benchmark, we expect the fund will perform better than the index over a longer period due to its 3-yr Alpha of 3.65 and 3-yr Sharpe Ratio of 0.94 against 0.78 of its index.

Recommendation:

We recommend equity mutual fund investors accumulate the fund units with a perspective of 3 to 5 years investment horizon.

ATS believes a client should be well informed and educated 360 degrees on the aspects of investments.

For detailed financial planning, funds recommendation, and portfolio management services, please write to us at research@adityatrading.com

To read more posts from ATS, check our blog at https://adityatrading.in/