CIO of Mirae Asset MF explains the recent lacklustre performance of his funds

Mirae Asset Large & Midcap Fund and Mirae Asset ELSS Tax Saver Fund have delivered remarkable returns for long-term investors, though their recent performance has been somewhat lacklustre. We spoke with Neelesh Surana, the fund manager of these schemes and the Chief Investment Officer (CIO) at Mirae Asset Investment Managers, to delve into the reasons behind this anomaly and his strategies to turnaround the funds' performance. He also shares his views on the banking sector, PSUs and new-age companies. The last few years have been tough for Mirae Asset Large & Midcap and Mirae Asset ELSS Tax Saver. What were the main hurdles and how do you plan to make a turnaround? If we look at the returns of the funds since inception and rolling five-year returns, they have been fairly decent. But the performance over the last couple of years has been soft, particularly in the last 18 months. In investing, there are always errors of omission and commission. I would say that it has more to do with the errors of omission, where we have probably been conservative in sectors such as industrials and the capex that have done well. It's not that we didn't invest in those names, but the weights were less. At the same time, certain sectors that we own, like consumer discretionary, except for autos - have not done well. Now, to answer the other part of the question - we firmly believe that the performance of the funds is an end result; the back end (stock selection and portfolio construction) remains the same. The lesson has been that we were underweight in industrials compared to the benchmark. Now, we are trying to see if there is an opportunity to look at some of the names and at the same time, double down on some of the positions that have been corrected in time and can make some sense in a risk-adjusted manner. So, I would say that a combination of omission and commission errors has come together in our environment, where the value (segment) moved significantly higher. So, it's a part of the learning journey. Are there

This article was originally published on March 06, 2024.