Mirae Asset Large Cap Fund: A Popular Fund Lagging on Risk-adjusted Returns

Market data reveals that the Indian equity market is trading at a noticeable premium compared to global peers.

The Morgan Stanley Capital International (MSCI) India Index trail PE is currently at 26, whereas that of the MSCI Emerging Markets Index and MSCI World Index is at around 16 and 24, as per the September 2025 factsheet.

That said, if we look at the market segments, the largecap stocks seem to be offering some margin of safety compared to midcaps and smallcaps. The Nifty 100 trail PE is at around 22, slightly lower than its 5-year average of 23. This appears to be a reasonable range.

In times where we are witnessing trade wars, geopolitical tensions, currency depreciation, macroeconomic uncertainty, and its potential impact on corporate earnings, allocating to largecaps makes sense.

Largecaps are well-established companies with resources, risk-taking ability, economic moats, market leadership, economies of scale, and are run by experienced management teams.

These stocks can possibly offer you relative stability while you aspire to grow your wealth.

To invest in largecaps or the bluechip segment of the market, large cap mutual funds make sense as they can offer you exposure to a wide range of stocks.

Simply put, you could potentially benefit from diversification.

In this editorial, we will take you through one of the popular and top 5 large cap funds by AUM, i.e. Mirae Asset Large Cap Fund.

Fund Overview

Mirae Asset Large Cap Fund was launched in April 2008 as Mirae Asset India Equity Fund, investing across market capitalisation and sectors.

However, after the capital market regulator enforced the mutual fund categorisation and rationalisation norms, it was rechristened as a large cap fund from May 2019.

At present, it invests as per the regulatory guideline, it invests at least 80% of its assets in equity & equity-related instruments of largecap companies. Largecaps, as you may know, are the first 100 companies on a full market capitalisation basis.

The fund also holds the mandate to invest up to 20% of its assets in other than largecap companies.

Besides, for liquidity purposes, the fund may invest up to 20% of its assets in debt & money market instruments.

Given its predominant allocation to largecaps, the investment objective is to generate long-term capital appreciation by capitalising on potential investment opportunities by predominantly investing in equities of largecap companies.

Over the years, the fund has seen a rise in its AUM, and as per the September 2025 portfolio, it is over Rs 396 billion (bn).

The fund has been managed by been by Gaurav Misra, the Co-head - Equity at Mirae Asset Mutual Fund, since January 2019. Before that, several other fund managers managed it for specific periods.

`Mirae Asset Large Cap Fund - Snapshot

Source: ACE MF

What is the Investment Strategy of Mirae Asset Large Cap Fund?

The fund, although predominantly invests (80%) in largecap companies, it holds the flexibility to invest (up to 20%) in non-large cap companies.

When sighting investment opportunities, the fund does not show any bias towards a particular theme, sector, or style in picking.

It aims to maximise the long-term capital appreciation by finding investment opportunities resulting from Indian economic growth and its structural shifts through investing in equities, equities-related securities, with risk-mitigating and controlling measures.

The fund identifies:

• High-quality business available at a reasonable price
• Companies with a sustainable competitive advantage
• Companies with strong pricing power and sector leaders
• Profitable growth-oriented companies run by competent management

Overall, it looks at business, management, and valuation - the three buckets - from a risk-reward matrix. Additionally, the fund keeps some space for deep value/turnaround/cyclicals.

The fund holds stocks for an extended period with conviction. That said, it also alters its investment strategy depending on various external factors.

Subject to the regulatory guidelines, the fund also takes derivative positions (up to 50% of its assets) based on the opportunities available.

What is the Portfolio of Mirae Asset Large Cap Fund?

Mirae Asset Large Cap Fund usually holds a portfolio of 80-85 stocks. As per the September 2025 portfolio, the fund has 85 stocks, of which over 88% are largecaps, about 7% largecaps, and 4% smallcaps.

The fund is fully invested, as cash & cash equivalents and investment in a liquid fund are cumulatively only about 0.2% of the total assets.

The top 10 stocks comprise 49.8% of the total assets and include names such as HDFC Bank (9.9%), ICICI Bank (8.2%), Infosys (5.5%), etc.

Among a diverse range of sectors, the top 3 sectors of the fund are banks (26.3%), IT (10.7%), and FMCG (9.7%), comprising 46.7% of the portfolio.

With a diverse portfolio, the fund avoids concentration and liquidity risk, helping it to deal with market uncertainty.

The fund holds stocks with conviction and a long-term view, as indicated by its low portfolio turnover, which has ranged between 39-49% in the last one year.

What Are the Historical Returns of Mirae Asset Large Cap Fund?

Despite holding a diverse investment portfolio while pursuing its investment strategy, the fund has disappointed on returns.

As of 23 October 2025, the compounding annualised rolling returns over the last 3 years, 5 years, and 7 years are 13.5%, 18.5%, and 13.7%, respectively.

The fund has lagged its category average by a noticeable margin. In 3 years, 5 years, and 7 years, the category average returns were 15.8%, 19.4%, and 13.9%, respectively.

The fund has also not been able to beat its benchmark, the Nifty 100 - TRI, in these time periods.

This is perhaps because many of the top holdings of the fund have not fared well. The cyclicality of the stocks has contributed to the fund's underperformance. A large portion of the corpus of the fund isn't performing, and hence it has been in the bottom quartile of performance.

Mirae Asset Large Cap Fund - Performance

Source: ACE MF

What About the Risk Profile of Mirae Asset Large Cap Fund?

The fund has exposed its investors to slightly lower risk (denoted by the standard deviation of 11.13) than its category peers.

But despite this, its sortino ratio - which reflects the risk-adjusted returns accounting for the downside risk - is almost in line with the category average and higher than the Nifty 100 - TRI.

You see, simply limiting downside risk is not enough; what you need as an investor is decent risk-adjusted returns. On overall risk-adjusted returns, as reflected by the Sharpe Ratio, the fund's performance is not very encouraging.

Should You Add Mirae Asset Large Cap Fund to Your Watchlist?

Mirae Asset Large Cap Fund is a low-risk, low-return proposition.

Although it comes from a fund house that boasts of robust investment processes and systems, its overall performance is not inspiring, despite it being among the top 5 large cap funds by AUM.

It is important to note that a popular mutual fund may not necessarily be the best one for your portfolio.

Large cap funds should be a part of the core equity mutual fund portfolio but care needs to be taken to identify the winners.

Be a thoughtful investor. Choose your mutual fund schemes wisely.

Happy investing.

Table Note: Data as of 23 October 2025
Rolling period returns are calculated using the Direct Plan-Growth option. Returns over 1 year are compounded annualised.
Standard Deviation indicates total risk, while the Sharpe Ratio and Sortino Ratio measure the Risk-Adjusted Return. They are calculated over 3 years, assuming a risk-free rate of 6% p.a.
*All large cap mutual fund schemes are considered to compute the category average returns.
Please note that this table represents past performance. Past performance is not an indicator of future returns.
The securities quoted are for illustration only and are not recommendatory.
Speak to your investment advisor for further assistance before investing.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.

Disclaimer: This write-up is for information purposes and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme-related documents carefully. Registration granted by SEBI, enlistment as IA with Exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.