Mirae Asset Mutual Funds has announced its new Midcap Fund scheme and the investors are keeping a keen eye on it.
The Mirae Asset Midcap Fund’s New Fund Offer period begins on July 08, 2019. From NFO unit price of ₹10 to having an objective of providing long-term capital appreciation, the Mirae Asset Midcap Fund looks promising for every investor out there.
We shall see what are Midcap funds—followed by the features of Mirae Asset Mutual Fund in detail below.
What Are Midcap Funds?
Even though there is no established standard, typically midcap funds invest predominantly in medium-sized companies.These companies are the ones that have a market capitalization value of over and above ₹5000 crores. This is in contrast with the small-cap funds and large-cap funds which invest in companies with a capitalization value of below ₹5000 crores and above ₹20000 crores respectively.
Midcap Funds: Pros & Cons
The Pro: Since the Midcap funds focus on the medium-sized companies, they have the attractive prospect of developing into a large-sized company. This means there is a prospect for a greater appreciation on investments in mid-cap funds compared to the large-cap funds.
The Mirae Asset Midcap Fund should not be an exception from this spectacular potential of the midcap funds to grow exponentially.
The Con: However, these medium-sized companies also carry affinity to the market risks than a large size company. Hence along with the potential to grow exponentially, the midcap funds are more vulnerable to the market volatility simultaneously.
MidCap Funds vs. Large-Cap Funds: What Should Be Your Choice?
As we have seen, Midcap funds have sufficient room for exponential and vigorous growth. On the other hand, relatively, the large-cap funds do not have much potential to grow than what it already is.
In contrast, the large-cap funds are less susceptible to the market risks compared to the midcap funds.
Hence, if your portfolio is conservative with only large-cap funds and can afford risky yet aggressive wealth creation investing in midcap funds shouldn’t be a worry.
Mirae Asset Midcap Fund: Features
The Mirae Asset Midcap Fund packs quite good features to provide long-term capital appreciation and flexibility for the investors. Let’s have a quick glance at the features of Mirae Asset Midcap Fund.
Fund Type:
-
Open Ended Equity Midcap Fund
NFO Period:
-
July 08, 2019 – July 22, 2019
Face Value:
-
₹10/Unit (During NFO period)
Investment Options
Lumpsum
| Minimum Lumpsum Amount | |
|---|---|
| Initial Application | ₹5000 |
| Additional Application | ₹1000 |
Systematic Investment Plan (SIP)
| Minimum SIP Transfers & Amount | |
|---|---|
| Minimum No. of Transfers | 5 |
| Minimum Amount Per Transfer | ₹1000 |
Payout Options
-
1. Cumulative Growth Option
- Dividend Payout
- Dividend Reinvestment
2. Dividend Option
Exit Load
| If the investment is redeemed within 1 year, from the date of allotment. | 1% |
|---|---|
| Exit load on redemption of investment after 1 year, from the date of allotment. | Nil |
Benchmark for Mirae Asset Midcap Fund:
- NIFTY Midcap 100 Index (TRI)
Risk Factor:
- Moderately High Risk
These are the specifications of the Mirae Asset Midcap Fund mentioned on the wrapper of the scheme. But this Midcap Mutual Fund scheme has other things going on under.
What Does The Mirae Asset Midcap Fund Do?
The Mirae Asset Midcap Fund scheme would allocate a minimum of 65% of assets to equity and equity-related securities of midcap companies. See the table below for detailed asset allocation.
Asset Allocation
| Instrument | % Allocation (Min-Max) | Risk Level |
|---|---|---|
| Equities And Equity Related Securities of Midcap Companies | 65%-100% | High |
| Equities And Equity Related Securities Other Than Above | 0%-35% | High |
| Money Market Instruments /Debt Instruments /Liquid Schemes of Domestic Mutual Funds | 0%-35% | Low-Medium |
The asset allocation of the Mirae Asset Midcap Fund will comply with the above-mentioned ratio at all the times.
Who Is The Fund Manager for Mirae Asset Midcap Fund?
Mr. Ankit Jain will be the fund manager for this Mirae Asset Midcap Fund.
He will be managing the Mirae Asset Midcap Fund along with the already existing Mirae Asset Emerging Bluechip Fund co-managed by Mr. Neelesh Surana and Mirae Asset Greater Consumer Fund.
Who Can Invest in Mirae Asset Midcap Fund?
- Resident Indian Adult Individual, Minor though Parent/Guardian,
- HUF (Hindu Undivided Family)
- NRIs/PIOs (Persons of Indian Origin)
- Qualified Foreign Investors subject to conditions of SEBI, RBI, Income Tax Authorities and the AMC.
- Partnership Firms under Partnership Act, 1932. Limited Liability Partnership (LLP).
- Religious and Charitable Trusts and Private Trusts authorized to invest under their trust deeds.
- Scientific and Industrial Research Organizations.
- Provident/Gratuity/Pension and other funds as permitted.
- Public Financial Institutions under Companies Act, 1956.
- Banking Company as defined under Banking Regulation Act, 1949.
- International Multilateral Agencies approved by RBI.
- Mutual Funds through their schemes if permitted by SEBI.
How Are The Other Midcap Mutual Funds Performing?
These are the average annualized returns for some of the already existing Midcap Funds.
- L&T Midcap has a 24.73% CAGR over the last 5 years and 15.15% CAGR over the last 3 years.
- Kotak Emerging Equity Fund has a 24.16% CAGR over the last 5 years and 12.86% CAGR over the last 3 years.
- DSP Midcap Fund has a 22.24% CAGR over the last 5 years and 13.39% over the last 3 years.
What Are The Possible Risk Factors in Mirae Asset Midcap Fund?
- Mirae Assert Midcap Fund has the standard investment risks including liquidity risks, settlement risk trading volumes and loss of principle.
- The risks of investing in midcap companies are always greater than investing in large-cap companies.
- The past performances of the fund house do not guarantee the success of this Mirae Asset Midcap Fund.
- The Mirae Asset Midcap Fund is not an assured return scheme. It also does not guarantee any dividend.
- The performance of the other schemes managed by the same fund manager is not a promising factor for this Mirae Asset Midcap Fund scheme.
- Mirae Asset will not be responsible for any loss incurred by the Mirae Asset Midcap Fund scheme.
Should You Invest in Mirae Asset Midcap Fund?
This Mirae Asset Midcap Fund scheme shows the quality and potential to deliver every investor’s wish.
However, the potential to deliver does not guarantee it in any way. Mirae Asset Midcap Fund still carries a high risk, like every other midcap fund scheme.
Even if your portfolio has room for aggressive wealth creation, choosing a midcap fund at the NFO itself is not recommended. You can, however, opt for already existing mid-cap funds that are performing well.
Since this is an open-ended equity scheme—let us be wise and not take the gamble until this Mirae Asset Midcap Fund actually performs.
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