Mirae Asset Emerging Bluechip Fund to limit SIPs to Rs 2,500 a month

Fresh inflows through systematic investment plans (SIP) have been limited in Mirae Asset Emerging Bluechip Fund (MAEBF). The amount allowed would be Rs 2500 per month, effective November 6. All SIPs and systematic transfer plans (STPs) registered earlier with the fund house will remain unaffected by the new limit.

The fund house had already stopped accepting lump-sum investments in October 2016. A year later, in November 2017, it had also capped the inflows through SIP to Rs 25,000 per investor a month.

Fund with an excellent record

Since its launch in July 2010, MAEBF has given 19.13 percent returns annually, according to Value Research. Being a large and mid-cap equity fund, it has topped the returns charts with 17.7 per cent returns in the last 10 years. The assets under management stand at Rs 11466 crore, and the scheme gets inflows of Rs 277 crore a month as on September 30, 2020.

“MAEBF is a scalable product and a gradual inflow may benefit our investors,” wrote Swarup Mohanty, CEO, Mirae Asset Investment Managers (India) in a communication addressed to the distributors of the scheme.

The fund house has also suspended registrations of quarterly SIPs. It also announced that no new registrations for STP will be allowed in this scheme.

“The fund house has restricted the inflows whenever it found the valuations at the higher end. Capping the inflows is good for existing investors, as it avoids dilution of portfolio quality,” says Amol Joshi, founder of Plan Rupee Investment Managers. If the market corrects in future, then the scheme may be reopened. In the meantime, existing investors’ interests are protected and even if the market continues the upward move, then too the existing investors do not suffer as the fund is fully invested, he adds.

The revised limit of Rs 2,500 on SIPs is a serious dampener for new investors. But at a corpus size of about Rs 12,000 crore, Swarup says that the fund has become a bit large and therefore inflows must be restricted to ensure fund managers are not overburdened while deploying a gush of inflows. “New investors, keen to invest more than the threshold prescribed by MAEBF, should not chase returns. Instead, after following their investment process, they should identify another well-managed equity scheme if their risk-taking appetite and financial goal permit,” says Joshi.