Mirae Asset large and midcap fund resumes subscription facilities after 3 years

Mirae Asset Mutual Fund has declared that the temporary halt on subscriptions for its Mirae Asset Large and Midcap Fund will be lifted. From August 1, 2024, onwards, investors can again invest in this fund through different means such as Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), Switch-ins and lump-sum investments.

The open-ended equity scheme is known as the Mirae Asset Large and Midcap Fund and beforehand been dubbed as the Mirae Asset Emerging Bluechip Fund and was created to invest in a combination of large-cap and mid-cap stocks. In this case, the temporary limitation on subscription facilities was primarily due to worries about market depth and liquidity. Initially, this restriction was imposed in November 2020 with a limit of ₹2,500 for monthly SIPs, which was later increased to ₹25,000 in October 2023.

Reasons for Reopening the Subscription

The decision to lift the subscription suspension comes after a comprehensive review by the Board of Directors of Mirae Asset Trustee Company Pvt. Ltd and Mirae Asset Investment Managers (India) Pvt. Ltd. The key factors influencing this decision include:

1. Market resilience and economic growth: Indian equities have demonstrated remarkable resilience, with significant gains observed in the Nifty 50 Total Return Index (TRI) and Nifty Midcap 150 Total Return Index (TRI). As of July 24, 2024, these indices have risen approximately 1.2 times and 2.3 times, respectively.

2. Increased market capitalisation: The aggregate market capitalisation of the Nifty Midcap 150 index has more than doubled from ₹82.5 lakh crores between November 2020 and June 2024. This growth reflects an expanded investment universe and increased opportunities in the mid and small-cap sectors.

3. Expansion and diversification: Over the past five years, the mid-cap space has seen the listing of over 50 new companies across various sectors, including financials, fintech, e-commerce, chemicals, logistics, and healthcare. This has contributed to greater market depth and liquidity.

4. Enhanced profitability: The aggregate profit (Profit After Tax) of the Nifty Midcap 150 index has grown by approximately 142% to ₹2.1 lakh crores from November 2020 to June 2024.

5. Investor feedback: There has been significant feedback from investors and distributors advocating for the removal of subscription limits to facilitate greater participation in the scheme.

Impact of the decision

The reinstatement of subscription facilities is expected to provide investors with renewed opportunities to participate in the growth potential of the Mirae Asset Large and Midcap Fund. The lifting of the subscription limits will enable both existing and new investors to contribute through SIPs, STPs, lump-sum investments, and switch-ins from other schemes.

This move aligns with the broader trend of growing investment flows in the large and midcap fund category, which have surged from ₹17,834 crores in FY19-20 to ₹47,440 crores in FY23-24.

Mirae asset large and midcap fund

Mirae Asset Large and Midcap Fund was launched on July 2, 2010, this open-ended scheme has a benchmark of NIFTY LARGE MIDCAP 250 TRI. As of June 30, 2024, it has a Total Expense Ratio (TER) of 1.53% and total assets of ₹37,852.75 crore. As of August 2, 2024, the NAV is ₹150.99. The compound annual growth rate (CAGR) since inception is 21.27%, compared to the benchmark's 16.99%.

Conclusion

The resumption of the subscriptions indicates an optimistic transition in the investment atmosphere and corroborates the fund’s capacity to handle more cash inflows while safeguarding present-day investors. The responsive plan of action from Mirae Asset and the incorporation of its clients’ suggestions show that it is able to give out solid investments within India’s active market.