Mirae Asset India equity fund changed into Large cap: How it may affect investors and what should they do?
Investment experts are of the opinion that the transfer of Mirae Asset India equity fund from multi-cap to large-cap would hit an investor's return by 1.5 to 2.5 per cent .
The Mirae Asset India equity fund has been changed from multi-cap to large-cap fund that may affect an investor's returns by 1.5 per cent to 2.5 per cent. However, investment experts are of the opinion that an investor must have a diversified investment portfolio and hence before quitting this fund, they must make an assessment whether this transfer of fund from multi-cap to large-cap would affect their portfolio or not because quit would hit the compounding benefits that an investor gain after a long-term investment.
Speaking on the matter Kartik Jhaveri, Director — Wealth Management at Transcent Consultants told Zee Business online, "Changing of a fund from multi-cap to large-cap or vise-versa is a regular phenomenon. An investor shouldn't quit from the investment only because of this transfer as it can happen to other funds which they would be choosing next or have chosen earlier." Jhaveri said that an investor should have a diversified portfolio which means that they should invest in mid-cap, multi-cap, large-cap funds through equal fund allocation.
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However, Jitendra Solanki, a SEBI registered investment expert said that in case of Mirae Asset India equity fund an investor's return in long-term perspective would be hit by around 1.5 per cent to 2.5 per cent because in large-cap funds, fund managers are bound to invest around 70 per cent of the funds available in large cap equities while in multi-cap funds fund managers have the luxury to invest around 30-35 per cent in mid-cap, small-cap and large-cap equities that enhances the chances of better returns.
"In multi-cap funds, an investor can expect around 14-15 per cent return on his or her investment for 10 or more years while in large-cap funds, the return would be around 12-13 per cent for same time period," Solanki suggested the investors who have invested in Mirae Asset India equity fund to quit if they already have investments in the large-cap mutual funds.