Mirae Asset Large Cap Fund

The fund can invest minimum 80% in equities and equity related securities of large Cap companies and it can go upto 100%. The fund can also invest in equity and equity related securities of companies other than large cap companies’ upto a maximum extent of 20%. The fund can also invest upto maximum 20% of its assets in debt securities including money market instruments. Market cap segment allocation as on 28th Feb 2023 was 82.86% large cap, 11.77% midcap, 4.39% small cap and 0.98% held in cash or cash equivalents.

SEBI classifies the top 100 stocks by market capitalization as large cap. Large cap stocks are usually less risky (prices are less volatile) than mid cap or small cap stocks. According to SEBI’s directive large cap schemes must mandatorily invest at least 80% of its assets in large cap; the remaining portion of the assets can be invested in midcap and small cap stocks. SEBI’s mandate for large cap schemes restricts flexibility of fund managers in terms of stock selection across market cap segments to a certain extent, but at the same time may limit downside risk for investors.

SEBI has, vide its circular no. SEBI/HO/IMD/DF3/CIR/P/2017/114 dated 6th October 2017 (‘Circular’), defined large cap, mid cap and small cap companies in order to ensure uniformity in respect of the investment universe for equity mutual fund schemes. Further, SEBI has also stipulated that AMFI shall prepare the list of stocks in this regard, in accordance with the points specified under para 8 of the circular.

Accordingly, AMFI, on a half yearly basis in consultation with SEBI and Stock Exchanges, prepares the list of stocks, based on the data provided by Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Metropolitan Stock Exchange of India (MSEI) and displays on its website

The AMCs are required to disclose full portfolios of each scheme on a monthly basis on their website and also on their monthly fact sheet. The scheme portfolio shows investment made in each security i.e. equity, equity related instruments and other instruments as per the scheme mandate, along with the respective quantities, market value and % weightage to the NAV as on the month end.

The fund invests 80% in large cap stocks and aims to combine consistency of large cap stocks with few conviction midcap ideas (not exceeding 20% of the total portfolio) across sectors and themes. The investment approach is centred on participating in high quality businesses upto a reasonable price – Companies which have sustainable competitive advantage, strong pricing power and sector leaders - and holding the same over an extended period of time. The fund seeks to identify profitable growth-oriented businesses and run by competent management. The scheme tries to identify companies which have sustainable competitive advantage – stocks which has strong pricing power and are sector leaders. Analysis of all three buckets – Business, Management, and Valuation is important from a risk-reward matrix. Additionally the fund keeps some space for deep value/turnarounds/cyclicals.

The investment objective of the scheme is to generate long term capital appreciation by capitalizing on potential investment opportunities by predominantly investing in equities of large cap companies. The Scheme does not guarantee or assure any returns.

Suggested investment tenure is 3– 5 years +.

The risk profile of Mirae Asset Large Cap Fund is ‘Very High’. Investors should understand that their principal investment in this fund will be at very high risk.

Investment in Mirae Asset Large Cap Fund is suitable for the following investors:-

• Investors looking for capital appreciation or wealth creation over sufficiently long investment horizon.
• Investors who have high to very high risk taking appetite for wealth creation .
• Investors should have minimum investment horizon of 3-5 years.
• Investors looking for stability in their equity mutual fund.
• First time investors with long investment horizon. The fund can be part of your core portfolio.

The Scheme has Regular Plan and Direct Plan with a common portfolio and separate NAVs. Investors should indicate the Plan for which the subscription is made by indicating the choice in the application form. Each of the above Regular and Direct Plan under the scheme will have the following Options - 1) Growth Option and 2) Dividend Option. Under the dividend Option, there will be 2 sub options -: 1) Dividend Payout and 2) Dividend Reinvestment.

Total Expense ratio or TER represents the annual fund operating expenses of a scheme, expressed as a percentage (%) of the fund’s daily net assets. All expenses of an AMC must be managed within the maximum limits of TER as per SEBI Mutual Fund Regulations.

As per the current regulations, the TER allowed is 2.25% for the first Rs.500 Crores, 2.00% for the next Rs.250 Crores, 1.75% for the next Rs.1250 Crores, 1.60% for the next Rs 3000 Crores and 1.50% for next Rs 5,000 Crores.

On the next Rs. 40,000 Crores of the daily net assets, TER reduction of 0.05% for every increase of Rs 5,000 Crores of daily net assets or part thereof, on the next Rs. 40,000 Crores of the daily net assets. Balance of assets, the TER would be 1.05%.

For example - An expense ratio of 2% per annum means that, each year 2% of the schemes’ total assets (AUM) can be used to cover operating expenses like administration, management, advertising and brokerage payment etc.

There may be changes from time to time in a mutual fund schemes. In such cases, the AMC is required to inform about the changes to all their unit holders through email or direct communication and through newspaper advertisement. Apart from the above, the Scheme Information Document (SID) and Key Information Memorandum (KIM) are also required to be updated.

With effect from this financial year (2020-21), dividends are taxable in the hands of the investor. The dividend has to be added to the total income of the investor and taxed at the income tax rate applicable to the investor. Tax Deducted at Source (TDS) at the rate of 10% will be done by AMC, if the dividend from equity funds exceeds Rs 5,000 in a financial year.

Capital gains arising out of long term investments (held for more than 12 months) are tax free upto Rs 1 Lakh in a financial year. Long term capital gain over Rs 1 Lakh in a financial year is taxed at 10%. Short term (investments held for less than 12 months) capital gains are taxed at 15%.

• Large cap funds are less volatile than midcap and small cap funds
• Large cap funds are capable of withstanding a bear market with relatively less value erosion compared to midcap and small cap funds
• Large cap funds have the potential of recovering faster from deep market correction compared to midcap and small cap.
• Large cap funds aims to provide stability to your portfolio and may help in steady wealth creation

• Benefits of investing in large companies – lower volatility, usually less affected by economic cycles, more stability, regular dividends and aims to provide steady capital appreciation.
• The fund is run by experienced fund managers with combined experience of 38 years.

The fund can invest up to 20% of its assets in stocks other can Large Cap.

The fund’s returns are subject to market risks. The returns of the funds can be volatile and even negative depending on market conditions. Past performance of the fund may or may not sustain in the future.