Every month, I make additional investments in Mirae Asset India Equity Fund. Following the reclassification of the fund effective from May 1, it has transformed from a multi-cap fund into a large-cap one. Should I still continue with my investments? And in case I stop investing in this fund, then should I replace it with any other multi-cap fund or some other types of funds?
Apart from this fund, I have additional purchases in three more funds, namely Motilal Oswal Multicap 35 Fund, SBI Magnum Multicap Fund and Aditya Birla Sun Life Equity Fund. Please suggest.
- Suveer
Your choice of funds has been very good. I would suggest that you should continue with Mirae Asset Large Cap Fund (erstwhile Mirae Asset India Equity Fund). Mirae AMC has come up with many explanations, justifying their move to reclassify their multi-cap fund into a large-cap fund. However, as per my understanding, if we consider the portfolio design of this fund, it was always a large-cap fund.
This reclassification exercise will lead the fund to invest predominantly in large caps, thereby reducing its freedom in terms of making investments in the entire investment universe. However, Mirae AMC has already come up with another multi-cap equity fund. So, you may consider shifting your investments to this new fund.
Your portfolio is very well-diversified both in terms of fund choices and the well-underlying portfolio level. This means you do not need to add any more fund to your portfolio. Among these funds, some may outperform at times, while some may underperform. However, sticking to your investments during bad times is an important principle that you must follow.
This article was originally published on May 10, 2019.
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