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Mirae Asset believes beating the benchmark indices for many actively managed mutual fund schemes would become increasingly difficult.
Swarup Mohanty, CEO, Mirae Asset, said most of the benchmark indices for mutual fund schemes are highly concentrated and it becomes difficult for the MF industry to beat them as there are no specific weightage limit on sectors or stocks, unlike MF schemes.
Following this, investment in passive funds mimicking indices carries more risk than actively managed funds, he said on the sidelines of an event to mark 15 years of Mirae Asset’s operations in India.
Growing industry
The S&P Indices Versus Active Funds report that compares the performance of actively managed Indian equity and bond mutual funds with their respective benchmark indices has reported that a majority of Indian equity large-cap funds failed to beat their benchmark, with 88 per cent of actively managed funds underperforming the S&P BSE 100.
The fund house recently made headlines by imposing restriction on inflows into its Emerging Bluechip fund and capped SIP at ₹2,500 a month per PAN number. Mirae Asset has received SEBI’s approval for launching multi-cap fund and will hit the market soon.
In 2007, when the fundhouse entered India, the industry AUM was ₹5.4-lakh crore with 11 out of 34 asset management companies being owned by foreign entities. In last 15 years, the industry’s asset has grown to ₹40-lakh crore with just six out of 42 AMCs being foreign-owned, said Mohanty.
Also read: Mirae Asset, ICICI MF top in holding five-star rated equity, hybrid assets
Interestingly, about 50 per cent of the overall industry’s assets are owned by individual investors, he added.
The first-ever Mirae Asset Large Cap Fund had collected ₹104 crore through new fund offer in 2008 and this fund has asset under management of ₹32,900 crore as of April 3 with 9.51 lakh folios.
The AMC has an AUM of ₹1.16-lakh crore, across 5.69 million folios as on March-end with a monthly SIP book of ₹860 crore. The AMC currently manages nine equity funds having an AUM of ₹93,613 crore, four hybrid funds with asset of ₹8,798 crore, 11 debt funds with ₹6,633 crore asset, three Index, 13 ETFs and eight Fund of Funds schemes, having a combined AUM of ₹7,267 crore.
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