3 Equity Mutual Fund Schemes For Long-Term Investors

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oi-Sunil Fernandes

| Published: Thursday, May 27, 2021, 10:48 [IST]

Let us begin with a warning: the Indian markets are near record highs and any lumpum investments in equity mutual funds is risky. Hence, we strongly advocate staggered investments or the SIP route to invest in mutual funds. Not only are the markets near record highs, they are expensive by any stretch of imagination. For example, the p/e of the Nifty is at a premium of 20% to long-term averages. Therefore, caution is advised. Here are three equity mutual fund schemes that we believe can churn returns in the long term.

Mirae Emerging Bluechip Fund

This fund is rated as 5-star by CRISIL, Value Research and Morning Star. The only problem for the fund is that the portfolio is heavily skewed towards financials with 4 out of the top 5 holdings being from the financial sector space. As such any weakness in the economy and subsequent fall in stock prices can see the portfolio under performing.

If you are looking to buy into the fund under the growth plans than the current NAV of the fund is Rs 84.13.

The portfolio of the fund include names like ICICI Bank, HDFC Bank, Infosys, Axis Bank and State Bank of India. While the fund invests both in large cap and mid cap stocks, the portfolio is more aligned towards the large cap stocks. Almost 99 per cent of the fund is invested in stocks, while the remaining 1 per cent is in cash.

Canara Robeco Emerging Equities Fund

This is another fund that is well rated, though its assets under management is significantly lower to the Mirae Emerging Bluechip Fund. The fund size as at the end of April was around Rs 8,000 crores, which may have gone higher now as the markets have gathered steam since then.

Again, like Mirae Emerging, the funds top 5 holdings are in and around the banking and financial sector with names like HDFC Bank, Axis Bank, ICICI Bank and Bajaj Finance among its top 5 holdings. The number of stocks in the portfolio is 60, with the top 10 holdings forming around 37% of the portfolio.

The growth plan has an NAV of Rs 136.17. Again, a good bet for those looking to invest for the long term. As indicated, invest in staggered amounts over the long term and avoid investing lumpsum.

Invesco India Midcap

Invesco India Midcap is a fund that invests in midcap stocks. The Fund has been well rated by rating agency Crisil, which has given it a 5-star rating. It’s important to understand that the markets are at a peak and investing in midcaps is more risky than largecaps.

There is a tendency for returns to be more volatile and hence we should be invest in midcap funds only if we have an appetite for risk. The fund has generated a 1-year returns of 74%, while the 5-year returns on an annualized basis is around 18%.

The fund has holdings in stocks like Vinati Pharma, Gland, Mphasis, Voltas, Endurance Technologies etc.


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Story first published: Thursday, May 27, 2021, 10:48 [IST]

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