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Launched in April 2008, Mirae Asset India Opportunities Fund has been ranked CRISIL Fund Rank 2 in the diversified equity category under the CRISIL Mutual Fund Ranking for the quarter ended March 2014. Average assets under management (AUM) of the fund for the quarter ended March 2014 were Rs 361 crore. Gopal Agarwal and Neelesh Surana have been jointly managing the fund since May 2008. Since its inclusion in the CRISIL Mutual Fund Ranking, the fund has been in the top 30 percentile (ranked 1 or 2) of the diversified equity category.
Performance
The fund has delivered superior returns and outperformed both its benchmark (S&P BSE 200) and the category average over one-, three- and five-year time frames, and since its inception. Since inception, the fund has posted returns at a compounded annualised growth rate (CAGR) of 16.64 per cent compared with 8.08 per cent and 11.65 per cent by its benchmark and the category, respectively. The volatility of the fund is comparable to that of the category. The fund's outperformance on a risk-adjusted basis is reflected in its Sharpe ratio of 0.90 compared with 0.50 for the benchmark over the past three years.
An investment of Rs 1,000 in the fund since its inception would have appreciated to Rs 2,598 as on June 16, 2014, versus Rs 1,619 and Rs 1,961 in the benchmark and the category, respectively. A monthly systematic investment plan (SIP) of Rs 1,000 in this fund for five years would have grown to Rs 96,691 on a principal investment of Rs 60,000, delivering an annualised return of 19.47 per cent. The same amount invested in the benchmark would grow to Rs 82,095, delivering an annualised return of 12.70 per cent.
The fund has shown consistent performance across market cycles. During the sub-prime crisis from April 2008 to March 2009, the fund declined (-35.19 per cent) lower than the benchmark (-40.38 per cent). During the sharp market recovery - post the sub-prime crisis - from April 2009 to December 2010, the fund substantially outperformed the benchmark (75 per cent CAGR returns by the fund versus 57.67 per cent by the benchmark). Thereby the fund has performed well across various timeframes and market phases.
The fund manager intends to analyse the macro economy, industry trends and business cycles while investing in companies which benefit from macroeconomic, industry and sectoral trends after doing a bottom-up analysis. The investment strategy of the fund is to have diversified portfolio with no bias towards a particular theme, sector, market cap or style.
Portfolio analysis
The fund has had an average exposure of 75 per cent to CRISIL defined large cap stocks (Top 100 stocks based on average market capitalisation on the NSE) over the past three years, ending May.
The fund is more diversified at the stock level compared with its peers. Over the past three years, it held an average of 55 stocks with the top five stocks accounting for 26 per cent of the portfolio against the category which held 45 stocks with the top five stocks constituting 29 per cent of the portfolio. About 64 per cent of the portfolio has been consistently held over the past three years. Exposure to stocks of Amara Raja Batteries, Lupin, Zee Entertainment, ITC and HDFC Bank has helped in boosting the fund's performance.
The banking sector has been the most favoured sector over the past three years with an average exposure of 17.84 per cent, followed by software (11.62 per cent) and pharmaceuticals (8.59 per cent). Compared with the category, the fund had higher exposure to auto ancillaries, pharmaceuticals and consumer non-durables sectors and lower exposure to minerals/mining, which helped it in outperforming the category over the past three years. The representative indices for these sectors - CNX Auto, CNX FMCG and CNX Pharma Index - gave superior annualised returns of 20.09 per cent, 22.89 per cent and 17.63 per cent, respectively. On the other hand, CNX Metal underperformed with -8.0 per cent over the same period.
CRISIL Research
