in

Top 3 Large & Midcap Funds Compared – Mutual Fund Comparison

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES Large and Midcap Mutual Fund MAEBF CREEF IIGOF

You are most probably here because you have boiled down your list of Large and Midcap Mutual Funds to either two or three names. But you are unsure of which fund to invest in. Although these funds might seem similar, one is not exactly a photocopy of another. So keeping your dilemma in mind, in this Mutual Fund Comparison, we are comparing the Top 3 Large and Midcap Mutual Funds in India.

In this Mutual Fund Comparison, we are going to analyze both the Qualitative and the Quantitative Fundamentals of Mirae Asset Emerging Bluechip Fund, Canara Robeco Emerging Equities Fund and Invesco India Growth Opportunities Fund. We have discussed the parameters on which we are going to judge these funds in our article about Fundamental Analysis of Mutual Fund. We can guarantee you that after you have finished reading this article, your confusion about which fund to invest in, will go right out of the window.

Before we start with this mutual fund comparison, let’s revise a few basics in a short and quick format.

If you know about the rules of making a Mutual Fund portfolio, then you know you can replace a Large Cap Mutual Fund with a Large and Midcap Mutual Fund in your portfolio, if you are willing to take the risks associated with a Large and Midcap Fund.

Large Cap Mutual Funds are very resilient funds in itself, but introducing Mid Cap Stocks into that mix brings the volatility and risks associated with Mid Cap Stocks. But if you are a risk-averse investor and you are just trying to dip your feet into the world of Mid Cap Mutual Funds, then a Large and Mid Cap Mutual Fund might fit your Mutual Fund Portfolio.

Ok, that was enough of an introduction. Now let us start the comparison between the funds, first with –

Qualitative Analysis

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

1. Fund House

  1. Mirae Asset Mutual Fund – Mirae Asset Emerging Bluechip Fund is managed by the Indian arm of Mirae Asset Financial Group. Mirae Asset is a South Korea based financial company, started in 1997. Mirae Asset as a fund house has seen the Indian Capital Market for more than 2 decades. Mirae Asset manages close to Rs. 44,534 Cr. as of June 2020 and 79% of that value comes just from Equity. This should show how strong their hold is over the equity segment.
    If you want to know more about Mirae Asset, then you can look at the corporate presentation developed by the company for their investors.
  2. Canara Robeco Mutual Fund – By the name you might think that it is an Indian Company as India does have a state-owned bank by the name Canara Bank. But in actuality, Canara Robeco Mutual Fund is a joint venture between Canara Bank and Robeco Group of The Netherlands (now owned by ORIX Corporation of Japan).
    Canara Robeco is the second oldest AMC or Asset Management Company in India, started in 1993. Earlier, the fund house was known as CanBank Mutual Fund. It was changed to Canara Robeco Mutual Fund after the joint venture with Robeco Group in 2007.
    Again, as per our requirement, it is an old fund house with a long history of operating in the Indian Capital Market.
  3. Invesco Mutual Fund – Invesco Mutual Fund is a part of Invesco Asset Management India Private Limited. The parent company Invesco is an American Investment Company. The Indian arm of the AMC handles a gigantic asset value of Rs. 27,104 Cr. as of September 2020. Invesco has a very well defined Investment Process, which a retail investor should always look for in an AMC. Their investment philosophy is geared for the benefit of the investors, and it is shared by every employee of the company. They have a well-designed company page dedicated to sharing their Investment Process.

As all the funds are from well-established fund houses, we cannot strike off any fund as of now.

The next parameter which we should look at is –

2. Category of Fund

We all know that all the three funds mentioned here are Large and Midcap Mutual Funds. They are from the same category.

If you are making a “2-Funds Portfolio”, then we would ask you to stay with Large Cap funds. But if you are making a “3-Fund Portfolio” following the rules of making a Mutual Fund portfolio, then Large and Midcap Mutual Funds like these might find a place in your portfolio.

However, we should at least look at Asset Allocation of each fund in conjunction with Market Cap.

Making it more simple for you,

How much each fund invest in the Large Cap Stocks, Midcap Stocks and Smallcap Stocks?

According to SEBI, Large and Midcap Mutual Funds must invest 35% of the total asset into Large Cap companies and another 35% of the total asset into Mid Cap companies.

Let us see how much of each fund went into which Market Cap.

  1. Mirae Asset Emerging Bluechip Fund46.38% of the fund’s asset is invested in Giant Cap Stocks. Giant Cap Stocks are super big, well-established companies like Reliance Industries, TCS, HDFC Bank etc. Giant Cap Stocks as a group forms 50 per cent of the total market cap of the Indian Equity Market. You can think of Giant Cap Stocks as Super Big Large Cap Stocks.
    11.05% of the fund’s asset is invested in Large Cap Stocks. 36.85% is invested in Mid Cap Stocks and the remaining 5.72% is invested in Smallcap Stocks.
  2. Canara Robeco Emerging Equities Fund41.01% of the fund’s asset is invested in Giant Cap Stocks, 5.88% is invested in Large Cap Stocks, 51.05% is invested in Mid Cap Stocks and 2.06% is invested in Smallcap Stocks.
  3. Invesco India Growth Opportunities Fund44.68% of the fund’s asset is invested in Giant Cap Stocks, 12.74% is invested in Large Cap Stocks, 40.38% is invested in Mid Cap Stocks and 2.20% is invested in Smallcap Stocks.

All data are as of 30th September 2020 and are collected from Value Research.

As we can see, Mirae Asset Emerging Bluechip Fund has (46.38 + 11.05) = 57.43% investment in Large Cap Stocks and 36.85% of the fund went into Mid Cap Stocks.

46.89% (41.01 + 5.88) of Canara Robeco Emerging Equities Fund went into Large Cap Stocks, and 51.05% of the fund is invested in Mid Cap Stocks.

57.42% (44.68 + 12.74) of Invesco India Growth Opportunities Fund is invested into Large Cap Stocks, and 40.38% of the fund went into Mid Cap Stocks.

So as we can see, the Mirae Asset and Invesco India fund have more than 50% of their investment allocated towards Large Cap Stocks. This allocation makes Mirae Asset Emerging Bluechip Fund and Invesco India Growth Opportunities Fund more resilient during tough times than Canara Robeco Emerging Equities Fund.

Though the Canara Robeco Fund is not as resilient as the Mirae Asset or the Invesco India Fund, Canara Robeco Emerging Equities Fund will see more growth compared to the other funds as it has more than 50% investment allocated towards Mid Cap Stocks.

According to our Fundamental Analysis of Mutual Fund article, the next parameter in this mutual fund comparison is –

3. Inception Date of the Funds

To judge a fund based on its Inception Date, we need to remember – “Older the Fund is, the better for us”.

1.Mirae Asset Emerging Bluechip Fund – Launched on 9th July, 2010.

2. Canara Robeco Emerging Equities Fund – Launched on 11th March, 2015.

3. Invesco India Growth Opportunities Fund – Launched on 9th August, 2007.

As we can see, the Invesco India Fund is the oldest among these three funds. It means that the Invesco India Growth Opportunities Fund has seen more market cycle than the other two funds.

But do remember, Inception Date just tells us when was the fund launched and how old the fund is, nothing more. So don’t look at any single parameter in isolation. Before making any investment decision, you need to review all the parameters of a Mutual Fund.

4. Riskometer

Though this parameter is not mentioned in our article on how to analyze a mutual fund based on its fundamentals, Riskometer is somewhat an important parameter.

Riskometer tells us how much risk our Invested Principal is carrying.

Every Mutual Fund has to mention the Riskometer of a particular fund on the website of the AMC or in the physical documents during the time of investment.

Riskometer looks like a Mathematical Protector with a Pointer. The whole half-circle is equally divided among five quadrants, Low, Moderately Low, Moderate, Moderately High and High. The pointer is used to point towards the risk quadrant the fund falls in.

For example, if a fund is a low-risk fund, then the pointer will point towards the Low quadrant. And if the fund is among the high-risk funds, then the pointer will point towards the High quadrant.

The pointer of the Riskometer of most equity mutual funds will point towards Moderately-High to High. The pointer of the Riskometer of most debt mutual fund will point towards Low to Moderately-Low.

That was quite a bit about Riskometer. Now let us get back to the mutual fund comparison.

As all the funds mentioned here are pure equity mutual funds. So Canara Robeco Emerging Equities Fund and Invesco India Growth Opportunities Fund have their Riskometer pointer pointing towards Moderately-High.

But according to a SEBI circular dated 5th of October 2020, Mirae Asset Emerging Bluechip Fund has its Riskometer pointer pointing towards “Very High” based on the portfolio of 31st December 2020.

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES Large and Midcap Mutual Fund MAEBF CREEF IIGOF
Old Riskometer of Mirae Asset Emerging Bluechip Fund
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Old and New Riskometer of Mirae Asset Emerging Bluechip Fund
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Riskometer of Canara Robeco Emerging Equities Fund
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Riskometer of Invesco India Growth Opportunities Fund

It means, though these mutual funds have their portfolio well-diversified between different Market Caps, Sectors and Stocks, still there is High Risk associated with these funds as these are equity mutual funds.

So be extra careful while investing in Equity Mutual Funds.

The next parameter to lookout for while comparing mutual funds is –

5. AUM of a Mutual Fund

We have discussed here that a large AUM is well suited for a Large Cap Mutual Fund while a Mid Cap and Small Cap Mutual Fund should have a well managed AUM size.

As we are comparing Large and Midcap Mutual Funds here, we would like our preferred fund to have neither a huge AUM size like that of a pure Large Cap Mutual Fund nor too small like a Small Cap Mutual Fund.

A ‘mid-ish’ size AUM is what we want. Larger than a pure Mid Cap Mutual Fund but smaller than that of a pure Large Cap Fund.

But do remember, you will still find discrepancy among AUM size of Large and Mid Cap Mutual Funds. Funds that tend to have a higher allocation towards Large Cap Stocks will have a larger AUM, than funds that tend to prefer Mid Cap Stocks.

According to Value Research, as of November 2020 –

The AUM of Mirae Asset Emerging Bluechip Fund is Rs. 13,405 Crores.

Canara Robeco Emerging Equities Fund has a AUM size of Rs. 6,880 Crores.

And Invesco India Growth Opportunities Fund manage assets worth Rs. 3,472 Crores.

Even after adding up the asset size of the Canara Robeco Fund and the Invesco India Fund, it still falls short to the AUM size of Mirae Asset Emerging Bluechip Fund. That’s how big and popular the Large and Midcap Fund of Mirae Asset is.

The funds of Mirae Asset and Invesco India have invested more than 50% of their AUM into Large-Cap Stocks. As these funds are heavily invested in Large Cap Stocks, these funds can afford to have a massive AUM size.

But the huge difference in the AUM size of the Mirae Asset and the Invesco fund is because of popularity and the habit of Indian Mutual Fund Investors, investing based on “Past Performance”.

Mirae Asset Emerging Bluechip Fund has performed tremendously compared to its peers in the past few years. And this past performance has fueled a huge inflow in the form of SIP to the fund, causing the AUM size discrepancy among its peers.

Even though the AUM size of the Mirae Asset Large and Midcap Fund might look huge compared to its peers, it is still small compared to the pure Large Cap Fund of Mirae Asset, which is as of December 2020 is Rs. 22,093 Crore.

Though investing in a fund which is having the largest AUM size among its peers is not a good idea, we need to watch out for other parameters to see why a single fund is getting such a huge inflow.

Next parameter to look out for in this mutual fund comparison is the comparison between different kind of returns of the funds.

6. Comparing the Returns of the Mutual Funds

Trailing Returns

Being the most famous and the useless among all, let’s start with Trailing Returns.

We will be comparing the funds on 3-time frames. 3 Years Trailing Returns, 5 Years Trailing Returns and 10 Years Trailing Returns.

Note- If you are investing in an Equity Mutual Fund with an investment horizon which is less than 3 years, then Money Premier would like to let you know that your financial troubles are on their way and they will knock your door any time soon.

3 Years Trailing Returns

As of January 2021 –

The 3 Years Trailing Returns of Mirae Asset Emerging Bluechip Fund is 10.80%

On the same period, Canara Robeco Emerging Equities Fund returned 7.96% on Trailing Returns basis.

And Invesco India Growth Opportunities Fund returned 8.64% to its investors based on 3 Years Trailing Returns.

5 Years Trailing Returns

As of January 2021 –

The 5 Years Trailing Returns of Mirae Asset Emerging Bluechip Fund is 18.72%.

On a 5 Years Trailing Returns basis, Canara Robeco Emerging Equities Fund returned 15.13%.

And Invesco India Growth Opportunities Fund returned 14.22% to its investors based on 5 Years Trailing Returns.

10 Years Trailing Returns

Again, as of January 2021 –

The 10 Years Trailing Returns of Mirae Asset Emerging Bluechip Fund is 21.09%.

Canara Robeco Emerging Equities Fund returned 18.24% to its investors on a 10 Years Trailing Returns basis.

And Invesco India Growth Opportunities Fund returned 12.28% based on 10 Years Trailing Returns.

Though Trailing Returns doesn’t paint the clearest picture, we can see that Mirae Asset Emerging Bluechip Fund has consistently beaten the Canara Robeco and Invesco India funds on a 3 Years, 5 Years and 10 Years Trailing Returns basis.

But let us see how these funds performed compared to their Benchmark Index and Category Average.

Comparing Funds to Benchmark Index and Category Average based on Trailing Returns

As all the funds mentioned in this mutual fund comparison falls into the category of Large and Midcap Funds, both the Benchmark Index and the Category of these funds are same.

The Benchmark Index of these funds is S&P BSE Large Mid Cap TRI, where ‘TRI’ stands for Total Return Index. And as said earlier, the Category of these funds is Large and Midcap Funds.

First, let us start with the fund from Mirae Asset.

Mirae Asset Emerging Bluechip Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Image Credit – Value Research

As we can see in the above picture, Mirae Asset Emerging Bluechip Fund has consistently beaten the Benchmark Index and the Category Average of the fund on a 3 Years, 5 Years and 10 Years Trailing Return basis.

The fund has outperformed its Benchmark Index and Category Average by a very long shot and has done it consistently.

Now let us move on to the next fund.

Canara Robeco Emerging Equities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Image Credit – Value Research

In the above picture, we can see that on the 3 Years Trailing Returns basis, the Large and Midcap Fund of Canara Robeco has beaten the Category Average by 2.24%. But the fund was unable to beat its Benchmark Index.

The Benchmark Index gave a return of 9.99%, or we can round that to 10% while Canara Robeco Emerging Equities Fund returned only 7.96% to its investor on the same time period.

So we can say that Canara Robeco Emerging Equities Fund underperformed compared to its Benchmark Index while it outperformed its Category Average on a 3 Years Trailing Return basis.

On the 5 Years and 10 Years Trailing Returns basis, the Canara Robeco Fund has outperformed both its Benchmark Index and Category Average.

After analyzing the Trailing Returns report, we can say that something has happened in recent years that has disrupted the fund’s performance in the short term. And we all know what Coronavirus in the year 2020 did to every industry.

Invesco India Growth Opportunities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Image Credit – Value Research

In the above picture about Trailing Returns of Invesco India Growth Opportunities Fund, we can see that again on the 3 Years Trailing Returns, the fund was able to beat its Category Average but underperformed its Benchmark Index.

Based on 5 Years Trailing Returns, the Large and Midcap fund of Invesco India outperformed its Category Average but again for the 2nd time it underperformed its Benchmark Index.

Now on a 10 Years Trailing Returns basis, though the fund outperformed its Benchmark Index, it didn’t outperformed the Large and Midcap Category Average. We can say, it performed like any other average fund present in that category.

After going through the Trailing Returns report of Invesco India Growth Opportunities Fund we can say that the fund Lacks what most Mutual Fund Investors try to find in an Equity Mutual Fund – Consistent Performance.

The performance of the fund based on Trailing Returns was very inconsistent. Though one should not judge a fund by just looking at the Trailing Returns, we can see why the AUM of Invesco India Growth Opportunities Fund was lowest among the 3 funds mentioned here. And why most investors find the fund unattractive to invest in.

Calendar Year Returns

Now let us discuss and see how these 3 fund performed based on Calendar Year Returns.

Calendar Year Returns portray a much better picture of how consistent the performance of a fund is. It also gives you an idea of how volatile a fund has been in the past years.

Before we start, let’s set our expectation first.

The funds we are comparing here today are Large and Midcap Funds. These funds will neither have a low volatility index like of a pure Large Cap Fund, where the fund gives low return each year but the return percentage doesn’t jump around much.

Nor these fund will have a high volatility index that of a pure Midcap or Small Cap Fund where the fund might give more than 25% return one year and the next year the return dips down into negative range.

These are Large and Midcap Funds, these funds will have certain characteristics of a Large Cap Fund and certain characteristics of a Midcap Fund. Now, whether these characteristics that are brought in from each side are good or bad, depends on the Fund Manager and the Fund House.

We will be tracking back 5 Years to see how each fund performed each year, starting from 2015 and ending on 2020.

Mirae Asset Emerging Bluechip Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Mirae AssetCategory AverageBenchmark Index
201514.083.92-0.46
201612.176.045.53
201749.0139.6934.18
2018-5.39-7.461.14
201914.728.0310.28
202022.4016.3213.29

From the above graph and table, we can see that Mirae Asset Emerging Bluechip Fund has consistently beaten its Category Average and its Benchmark Index by quite a margin, in the 5 year time period, starting from 2015 and ending on 2020.

But the year 2018 was an anomaly.

Though the fund has outperformed its Category Average (the fund went down less than the Category Average), it was unable to beat its Benchmark Index. But as we can see other funds of the same category on an average went down more than the Mirae Asset Fund, 2018 was a one odd year.

Or else, the fund has been a Consistent Outperformer, beating both its Category Average and Benchmark Index regularly.

Canara Robeco Emerging Equities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Canara RobecoCategory AverageBenchmark Index
201513.063.92-0.46
20162.566.045.53
201752.0539.6934.18
2018-9.24-7.461.14
20198.688.0310.28
202024.5516.3213.29

In the year 2015, Canara Robeco outperformed both its Category Average and benchmark Index by a handsome margin. But in the year 2016, the fund failed miserably, underperforming both its Category Average and Benchmark Index.

2017 was a high year for the Canara Robeco Fund. It has not only beaten its Category Average and its Benchmark Index. The Canara Robeco Emerging Equities Fund outperformed Mirae Asset Emerging Bluechip Fund, which finished first on most of the parameters discussed till now.

Just like any other Large and Midcap Mutual Fund, 2018 was a big down year for the fund. It underperformed both its Category Average and Benchmark Index.

The performance of the fund on the year 2019 was at par with its Category Average but underperformed its Benchmark Index.

For Canara Robeco Emerging Equities Fund, 2020 has been a good year. The fund outperformed its Category Average and its Benchmark Index by a large margin.

After analyzing the Calendar Year Returns of the Large and Midcap fund of Canara Robeco, we can say that the Volatility Index of the fund is too high. It is very hard even to make a ballpark estimate of the returns the fund would generate in a given year. And high volatility is not something Investors wants in their fund.

And the performance of the fund was not super good, considering that the fund has more than 50% of its assets allocated towards Midcap Stocks.

The fund is bringing in the volatility of a Midcap Stock and returns of a Large Cap Stock.

We want our Large and Midcap Fund to have the returns of a Midcap Stocks and the Stability of a Large Cap Stock. These depend on the fund management style, which is in the hand of the Fund Manager and the Fund House.

Invesco India Growth Opportunities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Invesco IndiaCategory AverageBenchmark Index
20153.833.92-0.46
20163.336.045.53
201739.6239.6934.18
2018-0.24-7.461.14
201910.708.0310.28
202013.2716.3213.29

At the first glimpse on the above graph and chart, we can see that Invesco India Growth Opportunities Fund is trying to replicate the performance of its Category Average.

In the years 2015 and 2017, the fund gave a similar return as its Category Average.

While 2018 was not a good year for most of the Large and Midcap funds, the Large and Midcap fund of Invesco India performed fairly well. The fund has not only beaten its Category Average but it fell the least among the others

In 2019 and 2020, the fund performed similar to that of its Benchmark Index.

After watching the Calendar Year Performance of Invesco India Growth Opportunities Fund, we can say that the fund is not trying to outperform its Category Average and its Benchmark Index. It is just trying to replicate the performance of the Category Average and the Benchmark Index, which is what a passively managed Index Fund does and not what we expect from an actively managed Equity Fund.

We are not saying this strategy is bad but the cost and the risks of this strategy are not justified, which we will discuss in the Expense Ratio section.

Rolling Returns

Now we will be discussing and comparing Rolling Returns of each of the funds in this part of the Large and Midcap Mutual Fund comparison.

Rolling Returns as we know shows us how consistent a fund has performed on an annualized basis over a particular period, without any kind of biases.

First, we would be looking at the 5 Years Rolling Returns of each fund compared to its Category Average starting from 1st January 2015. And then we would be looking at the 5 Years Rolling Returns of each fund compared to its Benchmark Index.

You can compare these funds with its Category or with its Benchmark Index on different time frames like 1 Year, 2 Years, 3 Years, 7 Years and 10 Years by clicking on the buttons below.

5 Years Rolling Returns vs Category Average
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES large and midcap mutual fund comparison top 3 large and midcap mutual fund in India
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

Mirae Asset Emerging Bluechip Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

From the above graph, we can see Mirae Asset Emerging Bluechip Fund gave the highest return among the 3 funds on a 5 Years Rolling Returns basis starting from 1st January 2015.

The worst performing period for the fund was between 22nd of March 2015 to 22nd of March 2020, where the Category Average gave a negative return of 4.05% but the fund returned 5.09% to its investor on an annualized basis.

The consistent outperformance of Mirae Asset Emerging Bluechip Fund is what makes it attract so much inflow which we saw in the AUM size.

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

If we take a look at the above table, we will see that on an average the Large and Midcap Fund of Mirae Asset gave a return of near about 13% based on 5 Years Rolling Returns. Which highest among all the funds and its Category Average.

The maximum return Mirae Asset Emerging Bluechip Fund generated for its investors in a given span of 5 Years is 17.97%, or we can round that up to 18%(even though 0.01% matters in finance). The least return the fund generated in a span of 5 Years is 5.09%.

Both the Maximum and Minimum return generated by the fund in a set period of 5 Years is highest among all the funds.

The Return Consistency section of the table is telling us that, in the 5 Years period of Rolling Returns starting from 1st January 2015, 25.42% of the time the fund generated returns in the range of 15-20%, which all the other funds failed to do.

That mean 1/4th of the time, the fund generated returns in the range of 15-20% within a span of 5 years.

Canara Robeco Emerging Equities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

This fund won the 2nd place when we charted out the 5 Years Rolling Returns of the fund compared to all the other funds and its Category Average starting from 1st January 2015.

The worst performing period for this fund was also between 22nd of March 2015 to 22nd of March 2020, where the Category Average went down to -4.05% but the Large and Midcap Fund of Canara Robeco returned 3.11% on the same period.

Looking at the 5 Years Rolling Returns of Canara Robeco Emerging Equities Fund against its Category Average, one might say that the fund might have not performed as good as the fund of Mirae Asset but it performed well compared to the Category Average.

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

Looking at the table of key parameters we can see that Canara Robeco Emerging Equities Fund on an average gave a return of 9.83% on a 5 Years Rolling Returns basis. Which is significantly higher than its Category Average of 3.40%.

The highest and the lowest return generated by the Large and Midcap Fund of Canara Robeco based on 5 Years Rolling Returns starting from 1st January 2015 is 14.39% and 3.11% respectively.

The return consistency section of the table tells us that more than 50% of the times the fund generated returns in the range of 8-12%.

If a High-Risk Equity Fund is generating returns in the range of 8-12% more than half of the time, then investors of the fund need to give a long and hard thought on their investing decisions.

Invesco India Growth Opportunities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

The Large and Midcap Fund of Invesco India came in 3rd based on of annualized returns it generated on a 5 Years Rolling Returns basis starting from 1st of January 2015.

The performance of the fund was weakest among all the funds mentioned in this mutual fund comparison report.

The weakest period for the fund was between 22nd of March 2015 to 22nd of March 2020 in which it returned just 0.51%. On the same period the fund of Mirae Asset and Canara Robeco returned 5.09% and 3.11% respectively. And Category Average for that same period was -4.05%.

Basically if you had invested a lumpsum amount on 22nd of March 2015 and redeemed your mutual fund units on 22nd of March 2020, you would have seen NEARLY ZERO GROWTH on your investment.

After looking at the 5 Years Rolling Returns of the Invesco India Growth Opportunities Fund, one might skip investing in this fund if other similar options are available.

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

The Key Parameters section of the above table tells us that on an average the fund gave an annualized return of 7.79% based on 5 Years Rolling Return.

The maximum annualized return this fund generated on a 5 Years Rolling Returns basis is 13.41% and the least is 0.51%.

Looking at the Return Consistency section we can see that more than 90% of the time the Large and Midcap fund of Invesco India generated an annualized return ranging from 0-12% on a 5 Years Rolling Returns basis.

Investing in a High Risk Equity Mutual Fund to yield an annual return rate of 12% most of the time is not something investors will be thrilled about.

Conclusion of 5 Years Rolling Returns

After going through the 5 Years Rolling Returns of the Large and Midcap Funds of Mirae Asset, Canara Robeco and Invesco India we can see that Mirae Asset Emerging Bluechip Fund gave the most consistent returns and also the highest return among all the 3 funds.

The next parameter we will look at is –

7. Fund Manager

  1. Mirae Asset Emerging Bluechip Fund – As of January 2021, Mirae Asset Emerging Bluechip Fund is managed by Neelesh Surana and Ankit Jain. The fund was managed by Neelesh Surana and Gopal Agarwal when it began. Neelesh Surana has been with the fund since its Inception Date. Ankit Agarwal started managing the fund from 31st of January 2019.
    Neelesh has a Mechanical Engineering degree and an MBA degree in finance from the Institute of Management Studies, Indore. Before joining Mirae Asset, Neelesh held a position in IL&FS’s Institutional Equity department. He was also a Senior Portfolio Manager at ASK Investment. At the moment Neelesh holds multiple positions in Mirae Asset, he is the Chief Investment Officer and Head of the Equity department. He also holds the position for Senior Vice President in the company.
    Ankit has a B.Tech degree in Information and Communication Technology. He also holds an MBA Core degree in finance from NMIMS. Ankit is also a Chartered Financial Analyst, he has CFA degree in finance from Virginia, USA. Ankit gained his experience in the market by working in multiple positions at many organizations starting from Siyaram Silk Mills to Infosys to holding a position as Research Analyst at Equirus Securities. He joined Mirae Asset as an Investment Analyst in September of 2015 and now he is a Fund Manager in the company.
  2. Canara Robeco Emerging Equities Fund – This fund has seen more than 10 Fund Manager changes. At the moment the Large and Midcap Fund of Canara Robeco is managed by Miyush Gandhi and Shridatta Bhandwaldar.
    Miyush is also an NMIMS MBA alumnus. He has been a Senior Equity Research Analyst and Fund Manager at SBI Life Insurance for 9 Years. As of April 2018, Miyush is a Fund Manager at Canara Robeco Asset Management Company.
    Shridatta has a Mechanical Engineering Degree from the Goverment Engineering College in Aurangabad and a Master Management Degree in Finance from Sydenham Institute of Management. Shridatta held multiple posts as an Analyst and as a Fund Manager at multiple organizations. Shridatta has been an Equity Analyst at MF Global Securities, Motilal Oswal, Heritage Capital (Hedge Fund dedicated towards India). Also, he has been the Head of Research and Portfolio Manager of SBI Pension Fund. At the moment Shridatta is a Fund Manager and the Head of Equities at Canara Robeco Asset Management Company.
  3. Invesco India Growth Opportunities Fund – Since the Inception of the fund, it has seen few manager changes but not like the Canara Robeco Fund. In the beginning, the fund was managed by Pradeep Kumar and at the moment Invesco India Growth Opportunities Fund is managed by Taher Badshah and Pranav Gokhale.
    Taher has been managing the fund since 10th of January 2017 and Pranav has joined on 19th of May 2020.
    Taher has an MBA degree in finance from S P Jain Institute of Management. He has been a Senior Fund Manager and Head of Equities in the Mutual Fund department of Motilal Oswal. Since January of 2017, Taher is a Director and Cheif Investment Officer of the Equity Department at Invesco Mutual Fund.
    Pranav Gokhale is a Chartered Accountant. He also holds a B.Com degree in Accounts from HR College, Mumbai. Pranav held an Assistant Manger post for Internal Audit at Kirtane and Pandit Chartered Accountants. He also held multiple Equity Analyst and Senior Analyst position at Rosy Blue Securities, ICICI Web Trade and IL&FS. He has been with Invesco for 12 Years and is now an Equity Fund Manager at the company.
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Fund Manager Details of Mirae Asset Emerging Bluechip Fund
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Fund Manager Details of Canara Robeco Emerging Equities Fund
mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Fund Manager Details of Invesco India Growth Opportunities Fund

*Data from MorningStar

Conclusion

Each an every Fund Manager mentioned above are highly qualified and are doing great job of managing the funds. But what concerns us is the radical change in Fund Manager in Canara Robeco Emerging Equities Fund and in Invesco India Growth Opportunities Fund.

The rapid changing of Fund Managers in both the above-mentioned fund might have caused these funds to underperform compared to Mirae Asset Emerging Bluechip Fund as we saw on the returns section.

The fund of Mirae Asset had a constant fund manager who managed to perform the best in the category, and at the moment he has a top managerial post in the company. So we can say that the Mirae Asset Fund as of now is less dependent on a Star Fund Manager and more on a process-oriented management style of the AMC.

If those regular changes in Fund Manager in the funds of Canara Robeco and Invesco India made them outperform their segment, then we would have had a point to discuss. But these funds neither had a fund manager with a long tenure nor they are the best performer in the Large and Midcap Funds segment.

While Mirae Asset Emerging Bluechip Fund has a Fund Manager who has managed the fund since inception and he also made the fund “the-best-in-class” in the category of Large and Midcap Funds.

8. Diversification of Mutual Fund

Diversification is an important parameter to look at while investing in a Mutual Fund. Diversification spreads your risk among multiple sectors and stocks and limits your loss when a certain sector or stock takes a beating.

We will be looking at the diversification of each in two parts. That is, first we will be looking at the Sectorial Diversification and then we will be looking at the Stock Diversification.

Sectorial Diversification

Mirae Asset Emerging Bluechip Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

Though the Large and Midcap Fund of Mirae Asset has a sectorial wise well diversified portfolio, but the concentration on financial sector is a lot more than the Category Average.

On average, a fund in the Large and Midcap category allocated 26.67% of its assets for the financial sector. Mirae Asset Emerging Bluechip Fund has allocated more than 33% of its investment in the financial sector.

Financial, Technology and Healthcare sectors get more than 50% allocation of the fund’s assets.

We can see that the Large and Midcap Fund of Mirae Asset has a sectorial concentration on the top 3 sectors and mainly on the financial sector. Which might make the fund vulnerable to economic distress.

This kind of sectorial diversification will make the fund take a severe beating if a “2008” kind of scenario arises. But the Fund House and the Fund Managers of Mirae Asset Emerging Bluechip Fund are capable enough to see those situation coming from a distance.

Canara Robeco Emerging Equities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

Canara Robeco Emerging Equities Fund has allocated 29.90% asset in the financial sector. Which is less than the fund of Mirae Asset, but is more than the Category Average of 26.67%.

Financial, Healthcare and Chemical sectors are the top 3 sectors the fund has allocated its assets towards. The top 3 sectors take up 48.57% of the fund’s assets.

We can again see an over dependent of a fund on the financial sector which makes the fund vulnerable to economic and financial distress.

Invesco India Growth Opportunities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

The Large and Midcap Fund of Invesco India has allocated 29.37% of its assets towards the financial sector. Which is the least among the 3 funds discussed here in this mutual fund comparison report, but is more than the Category Average of 26.67%.

Financial, Technology and Consumer Durable sectors are the top 3 sectors Invesco India Growth Opportunities Fund invest in. And 49.64% of the fund’s asset is allocated towards the top 3 sectors.

Conclusion

We can see an overarching theme of these Large and Midcap Funds allocating more than 25% or 1/4th of their assets towards the financial sector.

This kind of asset allocation makes the risks of these funds get concentrated over a single sector. And this concentration of asset over a single sector makes these fund vulnerable to the risks associated with the sector.

But if the fund manager can generate good returns by taking a few concentrated risks, then we shouldn’t be too worried about it.

Stock Diversification

Mirae Asset Emerging Bluechip Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Top 10 Holding of Mirae Asset Emerging Bluechip Fund

As of December 2020, Mirae Asset Emerging Bluechip Fund has a portfolio of 60 Stocks, where 27.26% of assets get allocated towards the Top 5 Holdings.

The Category Average for the number of stocks present in the portfolio of a Large and Midcap Mutual Fund is 52.18 Stocks. So with 60 Stocks, Mirae Asset Emerging Bluechip Fund is far more diverse than the Category Average.

Though we saw that the Large and Midcap Fund of Mirae Asset has a sectorial concentration on the financial sector, but the fund’s portfolio is well diversified in case of particular stocks. This makes the fund more stable and less risky.

Canara Robeco Emerging Equities Fund

Top 10 Holdings of Canara Robeco Emerging Equities Fund

As of December 2020, Canara Robeco Emerging Equities Fund has a portfolio of 58 Stocks, where 24.19% of assets get allocated towards the Top 5 Holdings.

With 58 Stocks in the portfolio, Canara Robeco Emerging Equities Fund is more diverse than the Category Average, which is 52.18 Stocks.

As the fund is more diversified than its Category Average, this helps the fund rank 2nd among all the 3 funds discussed here. As we saw in 5 Years Rolling Returns report, during the bad patch the Category Average generated returns in the negative domain, but this fund was able to keep its nose above the water.

Invesco India Growth Opportunities Fund

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES
Top 10 Holdings of Invesco India Growth Opportunities Fund

As of December 2020, Invesco India Growth Opportunities Fund has a portfolio of 46 Stocks, where 28.49% of assets get allocated towards the Top 5 Holdings.

With 46 Stocks in the portfolio, Invesco India Growth Opportunities Fund is less diverse than the Category Average, which is 52.18.

We would have liked the portfolio of this fund as diversification some time dilutes the upside. But the Large and Midcap Fund of Invesco India has sectorial concentration as well as individual stock concentration. And even with these concentrated bets, the fund has unable to perform among its top peers.

Conclusion

With less diversification in case of individual stocks and ending up last in all the returns report, Invesco India Growth Opportunities Fund has the least expectation remaining from us.

Now let us discuss the remaining two funds in this mutual fund comparison.

The funds of Mirae Asset and Canara Robeco has a well-diversified portfolio. The risk spread of these funds are pretty wide as both of the funds has more than average stocks in their portfolio.

But as Canara Robeco Emerging Equities Fund has less concentration on the Top 5 Holdings compared to the fund of Mirae Asset, the risk spread of the Canara Robeco Fund is even wider among the two.

9. Expense Ratio

Before we start, we should state that we will be using the Expense Ratio of the Regular version of the funds.

Do remember that Expense Ratio of Direct Funds are lower than Regular Funds as there is no Mutual Fund Agent or Advisor involved while investing in Direct Mutual Funds. And this what makes Direct Funds less expensive and more dangerous for new investors.

If you are not an expert in choosing the best mutual funds suited for you, then Money Premier recommends you to take the help of a Fund Advisor or Agent.

Mirae Asset Emerging Bluechip Fund

For investing in the Regular Fund of Mirae Asset Emerging Bluechip Fund, you will be charged an annual fee of 1.78%. That means, for every Rs. 1,000/- invested, Rs. 17.80/- will be deducted from you annually as a fee.

Canara Robeco Emerging Equities Fund

The Regular Fund of Canara Robeco Emerging Equities Fund has an Expense Ratio of 1.91%. That means, for every Rs. 1,000/- invested, you will be charged an annual fee of Rs. 19.10/-.

Invesco India Growth Opportunities Fund

For investing in the Regular Fund of Invesco India Growth Opportunities Fund, you will be charged an annual fee of 2.02%. That means, for every Rs. 1,000/- invested, you will be charged an annual fee of Rs. 20.20/-.

Conclusion

If we just focus on Expense Ratio, then we can see that the Regular Fund of Mirae Asset Emerging Bluechip Fund has the lowest Expense Ration among all the three funds discussed here.

After looking at the Expense Ratio of all the 3 funds, we can see that the funds that didn’t performed well in the returns report and had a ‘not-so-impressive’ portfolio charges the most.

Though AUM size also plays a role in how much a mutual fund can charge as Expense Ratio. According to SEBI, larger the AUM size gets, lower the Expense Ratio becomes.

And we have a calculation here showing you how 0.25% difference in Expense Ratio can either make you a Lakh or break you a Lakh.

So now you know why selecting a “good” mutual fund with a low Expense Ratio is important.

Quantitative Analysis

mutual fund comparison Invesco India Growth Opportunities Fund mutual funds comparison mirae asset emerging bluechip fund CANARA ROBECO EMERGING EQUITIES

In this part of the mutual fund comparison, we are going compare the above mentioned funds based on some risk ratios.

Before we start, we want to point out that these ratios shouldn’t be looked into isolation. Rather we need to compare these ratios and numbers with the Category Average and the Benchmark Index.

Before we start, we want to remind you again that if you are not able to understand certain terminology or what a particular ratio means, then please refer to our article explaining all the details.

1. Mean of the Mutual Funds

Mean of a Mutual Fund tells you the average annualized return the fund has generated on a given time period. You can say that Mean of a Mutual Fund is the Simple Average Return on a given time period.

Mirae Asset Emerging Bluechip Fund

The Mean of Mirae Asset Emerging Bluechip Fund is 12.26% as of 31st December 2020.

Canara Robeco Emerging Equities Fund

The Mean of Canara Robeco Emerging Equities Fund is 9.60% as of 31st December 2020.

Invesco India Growth Opportunities Fund

The Mean of Invesco India Growth Opportunities Fund is 9.87% as of 31st December 2020.

Conclusion

Mean Value of a Mutual Fund itself is not an important metric, but it gives us a glimpse of what is about to come.

Here we can see that the Large and Midcap Fund of Mirae Asset had the highest Mean Value among all the 3 funds compared here. Which is good for the Mirae Asset Fund.

Now let us compare it with the Category Average and the Benchmark Index.

The average Mean Value of Large and Midcap Funds as 31st December 2020 is 7.51%

And the average Mean Value of the S&P BSE Large Mid Cap TRI as of 31st December 2020 is 10.32%.

Now if we compare the Mean Value of the above-mentioned funds to their Category Average and Benchmark Index, we can see that all the funds have outperformed the Category Average.

But other than Mirae Asset Emerging Bluechip Fund, none of the other 2 funds was able to beat the Benchmark Index.

So we can that the Large and Midcap category as a whole had a weak performance compared to the Benchmark Index but Mirae Asset Emerging Bluechip Fund was the odd one out.

The fund of Mirae Asset not only outperformed the other 2 funds mentioned in this comparison, but also outperformed its Category Average and its Benchmark Index.

Now here comes some important metrics you should look out for when investigating a Mutual Fund.

2. Standard Deviation of the Mutual Funds

Standard Deviation of a Mutual Fund tells us how much it will rise or fall compared to its Mean. SD or Standard Deviation tells us how volatile the fund will be in respect to its Mean.

Lower Standard Deviation means the fund will move around less compared to its Mean Value. Lower Standard Deviation ‘within the category’ is good because we want our fund to be less volatile.

Mirae Asset Emerging Bluechip Fund

The Standard Deviation of Mirae Asset Emerging Bluechip Fund as of 31st December 2020 is 23.18%.

It means that the Large and Midcap Fund of Mirae Asset might go up or down by 23.18% compared to its Mean Value.

Canara Robeco Emerging Equities Fund

The Standard Deviation of Canara Robeco Emerging Equities Fund as of 31st December 2020 is 22.96%.

Invesco India Growth Opportunities Fund

The Standard Deviation of Invesco India Growth Opportunities Fund as of 31st December 2020 is 21.38%.

Conclusion

After looking at the Standard Deviation of all the funds, we can say that Invesco India Growth Opportunities Fund is the least volatile among all the 3 funds mentioned here.

But let us see how these funds perform when compared against the Category Average and the Benchmark Index.

The average Standard Deviation for the category of Large and Midcap Funds is 23.34% and S&P BSE Large Mid Cap Total Return Index has a Standard Deviation of 22.05%.

As we can see, all the funds had lower Standard Deviation compared to the Category Average. Or in other words we can say that all the funds mentioned here are less volatile compared to the Category Average.

On the other hand when we compare the above mentioned funds with the Benchmark Index we can see that other than Invesco India Growth Opportunities Fund, the other 2 funds have higher Standard Deviation than the Benchmark Index.

It means that the fund of Mirae Asset and Canara Robeco is more volatile than the Benchmark Index. While the Large and Midcap Fund of Invesco India is less volatile than the Benchmark Index.

When it comes to Standard Deviation, we can see that Invesco India Growth Opportunities Fund has a lower SD than the other two funds mentioned here in this mutual fund comparison. It also has a lower Standard Deviation when compared to its Category Average and its Benchmark Index.

And as discussed above, lower Standard Deviation means lower volatility.

Moving on to the next ratio, we have –

3. Beta of the Mutual Funds

The Beta of a Mutual Fund tells us how volatile a fund is compared to its Benchmark Index. If the Beta Value of a fund is more than 1, then the fund is more volatile than the Benchmark Index. And if the Beta Value is less than 1, then the fund is less volatile than the Benchmark Index.

We want our fund to have a higher Beta Value but it should be supported by the Alpha of the fund too, which we will discuss next.

Mirae Asset Emerging Bluechip Fund

Mirae Asset Emerging Bluechip Fund has a Beta Value of 1.01 as of 31st December 2020.

It means, if the Benchmark Index generates a return of 10% in a given time period, the fund will generate 11% return in the same time period. Similarly, if the Benchmark Index goes down by 10%, the fund will go down by 11%.

High Beta Value is a double edged sword.

Canara Robeco Emerging Equities Fund

Canara Robeco Emerging Equities Fund has a Beta Value of 0.98 as of 31st December 2020.

Invesco India Growth Opportunities Fund

Invesco India Growth Opportunities Fund has a Beta Value of 0.93 as of 31st December 2020.

Conclusion

Other than the Large and Midcap Fund of Mirae Asset, the other 2 funds has a Beta Value which is lower than 1.

It means the fund of Canara Robeco and Invesco India will rise less and fall less compared to the Benchmark Index.

Though you should always aim to invest in a fund which has a lower volatility compared to its peers, it shouldn’t compromise the returns generation capacity of the fund.

4. R-Squared Value of the Mutual Funds

R-Squared Value tells us how reliable the Beta Value of a Mutual Fund is. R-Squared Value greater than 0.8 is favourable for us.

Mirae Asset Emerging Bluechip Fund

According to the January 2021 Factsheet provided by Mirae Asset, the R-Squared Value of Mirae Asset Emerging Bluechip Fund is 0.98 as of 31st December 2020.

Canara Robeco Emerging Equities Fund

The R-Squared Value of Canara Robeco Emerging Equities Fund as of 31st December 2020 is 0.96 according to the portfolio statistics present in the fund page of Canara Robeco.

Invesco India Growth Opportunities Fund

The R-Squared Value of Invesco India Growth Opportunities Fund as of 31st December 2020 is 0.97 as stated in the Portfolio section of the fund page of Invesco India.

Conclusion

There is nothing much to conclude here as all the funds mentioned here have an R-Squared Value greater than 0.8. So the Beta Value of all the 3 funds is very reliable.

5. Alpha of the Mutual Funds

Alpha tells us how much extra returns a fund has generated over the prediction made by the Beta Value of the fund.

This ratio kind of quantifies the capabilities of the Fund Manager or the Fund House.

Unlike Standard Deviation and Beta, which are one-dimensional ratios, which means that those ratios only tells us by “how much” the fund will move. Those one-dimensional ratios don’t tell us in “which direction” the fund is going to move.

But the Alpha of a fund does tell us the “direction” of the movement.

A positive Alpha signifies that the fund has outperformed the prediction made by the Beta Value of the fund. Whereas a Negative Alpha signifies that the fund has underperformed the prediction made by the Beta Value.

Mirae Asset Emerging Bluechip Fund

Mirae Asset Emerging Bluechip Fund has a Alpha of 0.77% as of 31st December 2020.

It means the Beta Value of the fund has predicted that the fund should move up or down by 11% if the Benchmark Index move up or down by 10%.

But in reality the fund actually went up by 11.77%. So the Alpha of the fund becomes (11.77 – 11) = 0.77%.

Similarly, as the Alpha of the fund is positive. If the Benchmark Index went down by 10%, the fund of Mirae Asset will not go down by 11% as predicted by the Beta Value. It will move by (-11 + 0.77) = -10.23%.

So you see, a positive Alpha not only implies that the fund will move up more, but it also implies the fund will fall less compared to the prediction made by the Beta Value.

Canara Robeco Emerging Equities Fund

Canara Robeco Emerging Equities Fund has an Alpha of -1.70% as of 31st December 2020.

If a Mutual Fund has 35% or more of its assets invested in Midcap Cap Stocks, and still the fund has a negative Alpha, then there is no point of further discussion.

All jokes aside, the negative Alpha of the Canara Robeco Fund implies that the fund has underperformed over the prediction made by the Beta Value of the fund.

The fund was already an underperformer compared to its Benchmark Index as the Beta Value of 0.98% predicted.

Now the Alpha of the fund is saying that in reality, the fund has underperformed more compared to the prediction made by the Beta Value.

If the Benchmark Index of the Canara Robeco fund rise by 10%, the fund will go up by 9.8% as predicted by the Beta Value. But the Alpha is saying that the fund has underperformed by 1.70% over the prediction of the Beta Value.

That means, if the Benchmark Index has risen by 10%, the fund has actually gone up by {9.8 + (-1.70)} = 8.10%.

Similarly, if the Benchmark Index went down by 10%, according to the Alpha of the fund, the fund has went down by {-10 + (-1.70)} = -11.70%.

So, a fund with negative Alpha Value will not only go up less, but will also go down more.

Invesco India Growth Opportunities Fund

Invesco India Growth Opportunities Fund has an Alpha of -1.10% as of 31st December 2020.

Again we get to see a mutual fund with negative Alpha where 35% or more of the fund’s assets are invested in Midcap Stocks.

As explained earlier, negative 1.10% Alpha means that the fund has actually underperformed compared to the prediction made by the Beta Value.

The Beta Value of the fund predicted that if the Benchmark Index go up by 10%, the fund will rise by 9.3%. But in reality, the fund actually went up by {9.3 + (-1.10)} = 8.2%.

Again, the fund will go down by 10.40% if the Benchmark Index went down by 10%.

Conclusion

Other than the Mirae Asset Emerging Bluechip Fund, all the other funds mentioned here in this mutual fund comparison had a Negative Alpha Value, which is disastrous for an investor.

If an Equity Fund which has more than 1/3rd of its assets invested in Midcap Stocks has negative Alpha, then it is time to move on.

If

The next ratio we will look at is –

6. Sharpe Ratio of the Mutual Funds

Sharpe Ratio tells us how much risk a fund is taking to generate the returns. A high Sharpe Ratio indicates that the fund is taking a minimal risk to generate high returns. So a well managed mutual fund will always have a higher Sharpe Ratio.

A lower Sharpe Ratio means the fund is taking high risk to generate high returns. So a fund with higher Sharper Ratio is desirable.

Mirae Asset Emerging Bluechip Fund

As of 31st December 2020, Mirae Asset Emerging Bluechip Fund has a Sharpe Ratio of 0.32.

Canara Robeco Emerging Equities Fund

As of 31st December 2020, Canara Robeco Emerging Equities Fund has a Sharpe Ratio of 0.21.

Invesco India Growth Opportunities Fund

As of 31st December 2020, Invesco India Growth Opportunities Fund has a Sharpe Ratio of 0.24.

Conclusion

Out of all the 3 funds mentioned here, Mirae Asset Emerging Bluechip Fund has the highest Sharpe Ratio. Which means, the Large and Midcap Fund of Mirae Asset is taking the least risk among all the 3 funds to generate the returns.

While the Category Average Sharpe Ratio of Large and Midcap Funds is 0.12 and the S&P BSE Large Mid Cap Total Return Index has a Sharpe Ratio of 0.25.

When we compare the above-mentioned funds with the Category Average and the Benchmark Index, we see that –

Mirae Asset Emerging Bluechip Fund has a higher Sharpe Ratio than both the Category Average and the Benchmark Index. That means the fund of Mirae Asset is taking much lesser risk compared to the Category Average and the Benchmark Index.

Though the Canara Robeco Fund has a higher Sharpe Ratio compared to the Category Average, it has lower Sharpe Ratio when compared with the Benchmark Index. It means the fund is taking less risk compared to the Category Average but it is taking a higher risk when compared with the Benchmark Index.

Though the Invesco India fund has performed horribly so far, in case of Sharpe Ratio, the performance is neck to neck with both the Category Average and the Benchmark Index.

The final ratio that we will look at is –

7. Sortino Ratio of the Mutual Funds

Sortino Ratio helps us ‘sort’ funds which are generating high returns but has lower downside risk. (Pun totally intended 😆)

To generate high returns, a fund has to take high risk. But with the help of Sortino Ratio, we can check whether with the high risk comes high downside possibility.

We want our fund to generate high returns, but we definitely do not want to invest in a fund which is taking unnecessary risks to generate high returns.

A fund with high Sortino Ratio means the fund is generating quality returns by taking only the necessary risks. So we want to invest in a fund which has the highest Sortino Ratio among its peers.

Mirae Asset Emerging Bluechip Fund

The Sortino Ratio of Mirae Asset Emerging Bluechip Fund is 0.38 as of 31st December 2020.

Canara Robeco Emerging Equities Fund

The Sortino Ratio of Canara Robeco Emerging Equities Fund is 0.23 as of 31st December 2020.

Invesco India Growth Opportunities Fund

The Sortino Ratio of Invesco India Growth Opportunities Fund is 0.26 as of 31st December 2020.

Conclusion

Yes, we all can see that out of all the 3 funds, Mirae Asset Emerging Bluechip Fund has the highest Sortino Ratio. Which means the fund of Mirae Asset is taking the least amount of risks to generate returns.

But the beauty of the portfolio management and stock selection of the Mirae Asset Fund is more evident when we compare it with the Category Average and the Benchmark Index.

The average Sortino Ratio of the Large and Midcap category is 0.14 and the Benchmark Index has a Sortino Ratio of 0.29.

This means Mirae Asset Emerging Bluechip Fund is far less risky than both the Category Average and the Benchmark Index.

And it is very hard to beat a Benchmark Index when it comes to safety and Principal Protection.

When we compare the Sortino Ratio of the funds of Canara Robeco and Invesco India, we can see that both the funds have beaten the Category Average but was unable to beat the Benchmark Index.

So we can say that both the funds of Canara Robeco and Invesco India are taking less risk compared to the Category Average but are risky than the Benchmark Index.

Conclusion of this Mutual Fund Comparison

If you have read the whole article then by now you know, that on most of the parameter discussed in both the Qualitative and Quantitative Fundamental Analysis section of this mutual fund comparison, Mirae Asset Emerging Bluechip Fund came out first with flying colours.

Mirae Asset Emerging Bluechip Fund

Qualitative Analysis

  1. Is from a good and reputed Fund House
  2. Falls in the Category of Large and Midcap Funds with more than 50% assets allocation towards Large Cap Stocks, which provides good stability and consistency to the fund.
  3. Is the 2nd oldest fund among its peers.
  4. After recent SEBI circular, the Riskometer of the fund now points towards “Very High”, which means the invested principal will be at very high risk.
  5. Has the highest AUM size among all the 3 funds compared here. With high assets allocation towards Large Cap Stocks, Mirae Asset Emerging Bluechip Fund can afford to have such a huge AUM size.
  6. Is the best performer on all the returns parameters discussed in this mutual fund comparison.
  7. Is the only fund among the 3 to have a constant Fund Manager since its inception.
  8. Is the most diversified fund among all the funds mentioned here. Though the fund has a sectorial concentration on the financial sector, it is well diversified in case of individual stocks.
  9. Has the lowest Expense Ratio among all the 3 funds discussed here.

Quantitative Analysis

  1. Has the highest Mean Value among all the 3 funds.
  2. Has the highest Standard Deviation among all the 3 funds.
  3. Has a Beta Value of 1.01, highest among all the 3 funds. And it is the only fund among all the 3 funds to have a Beta Value more than 1.
  4. Has an R-Squared Value of 0.98 which is highest among all the 3 funds.
  5. Is the only fund to have a positive Alpha of 0.77% among all the 3 funds mentioned in this mutual fund comparison.
  6. Has the highest Sharpe Ratio among all the 3 funds.
  7. Has the highest Sortino Ratio among all the 3 funds discussed here.

So, the question remains –

Which Large and Midcap Mutual Fund should I invest in?

After this thorough comparison of these 3 Large and Midcap Funds, we can say that Mirae Asset Emerging Bluechip Fund is the best Large and Midcap Fund in India to invest in. This is the only well-managned fund and the best performer among all the 3 funds. And we will definitely choose the fund of Mirae Asset any day of the week.

What made us like the fund, even more, was its low Expense Ratio but the best performer among all the other funds. And the only fund which has a Fund Manager who has been managing the fund since its inception.

In the Quantitative Analysis section, the Large and Midcap Fund of Mirae Asset just whitewashed all the other funds. And in most of the parameters, the fund was outperforming the Category Average and even the Benchmark Index.

Now, lastly –

How to Invest in Mutual Funds?

There are mainly 3 ways to invest in Mutual Funds.

  1. Invest through a Mutual Fund Advisor or Agent – If you are new to the world of Mutual Fund Investment and know nothing about Mutual Funds then we suggest you invest through a Mutual Fund Advisor or Agent. An MF Advisor or Agent will help you to choose the correct fund according to your Goal and Risk Appetite.
    But if you invest in Mutual Funds through an agent or advisor, you have to bear the advisory fee or commission of the agent. The fee or commission is deducted from your investment value, whether be it a Systematic Investment Plan or Lumpsum Investment.
  2. Through Web Portal of the AMC – Most of the reputed Asset Management Company or AMC has an investment portal on their website from where you can invest in their funds.
    If you invest through the Web Portal of the AMC, you will be able to choose Direct Funds which has lower Expense Ratio than Regular Funds.
    And we have discussed in this article how 0.25% of the difference in Expense Ratio can either be good or bad for you.
    But if you invest through the investment portal on the AMC’s website, you have to track your investments on your own. And if you have invested in multiple funds from different AMCs, remembering the Usernames, Passwords and tracking each fund becomes hectic.
  3. Through Stock Brokers or Apps – Most of the reputed discount broker such as Upstox or Zerodha provide a platform directed towards Mutual Fund Investments for their customers. Where users can invest in ‘Direct’ Funds under one roof.
    We created a thorough guide of Upstox where we discussed how to invest in Mutual Funds using Upstox’s MF Platform.
    If you are not a Desktop savvy person then there is still a way for you using your smartphone. Groww allows you to invest in Direct Mutual Funds through their app. We have discussed in detail how to use Groww here.

We hope you liked this comparison of the Top 3 Large and Midcap Mutual Fund in India. If this article has helped you in choosing the right fund for yourself kindly give an Upvote down below. And if you have any question or query, do ask them in the comments section below. We will definitely try our best to answer them.

But always remember – Mutual Fund Investments are subject to market risk. Please read all scheme related documents carefully before investing.

To end this comparison, we would say – Good Luck and Happy Investing!😊

Disclaimer: The views, investment tips, presumptions, and calculations expressed on Moneypremier.net are not of the website or its management. This article is for Educational Purpose only. Moneypremier.net advises users to check with certified experts before making any financial decisions.

What do you think?

Written by Sayantan Chakraborty

I have been investing in the Indian stock market for more than 8 years. I have invested in the Indian Stock Market via Mutual Funds, ETFs and Direct Stocks. I have seen multiple markets cycle, and from my experience, all I can say is persistence is the key to succeed in the Indian Stock Market, as an investor.
I also Love reading financial books and company results and reports.
You can ask me anything on Twitter by clicking on the button below.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0
espresso by sharekhan espresso from sharekhan discount broker discount broker in India best discount broker in India cheap discount broker in India zero brokerage broker in India Sharekhan discount broker

Espresso by Sharekhan – Discount Broker Review ’21

is it safe to buy gold on paytm is it safe to buy from paytm how safe is it to buy gold from paytm safety of digital gold where is paytm gold stored is paytm gold safe invest in gold online

Is it Safe to Buy Gold on Paytm?