Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G): NFO Details

Investment Objective and Strategy

Objective:

The investment objective of the scheme is to generate returns, before expenses, that are commensurate with the performance of Nifty LargeMidcap 250 Total Return Index, subject to tracking error. 

There is no assurance or guarantee that the investment objective of the scheme would be achieved.

Investment Strategy:

The investment strategy of the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) is to replicate the composition and performance of the Nifty LargeMidcap 250 Index as closely as possible. This is achieved by investing in the same companies that comprise the index in the same proportion, following a passive, index-based strategy.

Key aspects of the strategy include:

• Index Replication: The fund invests in a portfolio of 250 companies—100 large-cap and 150 mid-cap companies—mirroring the Nifty LargeMidcap 250 Index. This provides diversified exposure across sectors and market capitalizations.

• Cost Efficiency: Since the fund follows a passive strategy, it typically has lower costs compared to actively managed funds, making it more efficient for investors looking for broad market exposure without higher management fees.

• Long-term Growth Focus: The fund’s blend of large-cap stability and mid-cap growth potential is designed to offer long-term capital appreciation. Large-caps provide resilience, while mid-caps offer opportunities for higher growth during economic expansions.

• Rebalancing: The fund’s portfolio is periodically rebalanced to align with changes in the underlying index due to market movements, corporate actions, or updates in the index methodology.

By following a structured and disciplined approach, the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) allows investors to benefit from the combined performance of India's largest and mid-sized companies.

Why Invest in Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G)?

Investing in the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) offers several compelling advantages for investors seeking long-term capital growth. Here are key reasons to consider investing in this fund:

• Diversified Exposure: The fund provides exposure to a mix of 250 companies across large-cap and mid-cap segments, offering the best of both worlds. Large-caps typically offer stability, while mid-caps provide higher growth potential, leading to a balanced portfolio.

• Broad Market Representation: By investing in both large-cap and mid-cap stocks, the fund captures the performance of a wide spectrum of India's economic sectors and companies. This diversification reduces the impact of volatility in any one sector or stock.

• Cost-Effective Investment: As a passively managed index fund, the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) typically has lower management fees and expense ratios compared to actively managed funds, making it a cost-efficient option for investors.

• Long-Term Growth Potential: India’s large and mid-cap companies are often well-positioned to benefit from the country’s long-term economic growth. The fund provides an opportunity to participate in this growth story, benefiting from both established market leaders and high-growth mid-sized companies.

• Transparent and Disciplined Approach: The fund follows a systematic, rule-based approach, closely tracking the Nifty LargeMidcap 250 Index. This transparency and consistency make it a reliable option for investors who prefer to avoid the unpredictability of active management.

• Low Maintenance: Since it is an index fund, investors do not need to actively manage or time the market. The fund automatically adjusts with the index, ensuring continuous alignment with market trends and opportunities.

By offering a combination of stability, growth potential, and cost efficiency, the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) is an attractive option for long-term investors looking for broad exposure to India’s evolving economic landscape.

Strength and Risks - Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G)

Strengths:

Investing in the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) comes with several strengths that can make it a valuable addition to an investor’s portfolio. Some of the key strengths include:

• Comprehensive Market Exposure: The fund invests in 250 companies, offering exposure to a broad range of industries and sectors across large-cap and mid-cap stocks. This wide market coverage provides access to both established market leaders (large-caps) and high-growth potential companies (mid-caps).

• Balanced Risk-Return Profile: By combining large-caps known for stability and steady returns with mid-caps that often show higher growth but with increased volatility, the fund offers a balanced approach. This mix reduces the risk compared to a pure mid-cap fund while still capturing growth opportunities.

• Cost Efficiency: As a passive index fund, the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) generally has lower expense ratios compared to actively managed funds. This means a larger share of the returns stays with the investor, making it a cost-effective investment vehicle.

• Low Portfolio Turnover: The passive nature of the fund leads to lower portfolio turnover, reducing transaction costs. This also minimizes the tax impact from capital gains, which is an advantage for long-term investors looking to optimize returns.

• Diversification: Investing in 250 companies across different sectors reduces the concentration risk associated with individual stocks or sectors. This diversification helps mitigate the impact of volatility in any single sector, leading to smoother returns over the long term.

• Participation in India’s Economic Growth: India’s large-cap companies are often the blue-chip leaders of the economy, while mid-cap companies represent high-growth opportunities. The fund allows investors to benefit from the growth potential of both segments as India’s economy expands.

• Automatic Index Rebalancing: The fund automatically adjusts its portfolio to match the changes in the Nifty LargeMidcap 250 Index. This ensures that the fund remains aligned with the current market conditions without the need for active management or individual intervention.

• Transparency: As an index fund, the holdings and investment strategy are fully transparent. Investors can easily track the underlying portfolio and performance relative to the Nifty LargeMidcap 250 Index, providing clarity on where and how their money is being invested.

By leveraging these strengths, the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) offers a robust option for investors seeking long-term wealth creation with a diversified, low-cost, and balanced equity exposure.

Risks:

While the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G) offers several advantages, it also comes with certain risks that investors should consider:

• Market Risk: Like any equity fund, this index fund is subject to overall market volatility. Changes in economic conditions, geopolitical events, inflation, interest rate fluctuations, or other macroeconomic factors can affect the performance of the stock market, potentially leading to losses.

• Volatility in Mid-Cap Stocks: Mid-cap companies, which form a significant portion of the fund, are typically more volatile than large-cap stocks. While they offer higher growth potential, they also come with higher risk. In times of market downturns, mid-cap stocks may experience larger price swings and may be more susceptible to liquidity issues.

• No Active Management: Since the fund is passively managed and aims to replicate the Nifty LargeMidcap 250 Index, it doesn’t benefit from active stock selection. This means the fund will not make adjustments to avoid specific underperforming sectors or companies, even if there are known risks in the market.

• Tracking Error: Although the fund seeks to closely match the performance of the Nifty LargeMidcap 250 Index, there may be some deviation due to factors like fund expenses, transaction costs, or changes in the composition of the index. This can result in the fund’s performance slightly lagging behind the index.

• Concentration Risk: While the fund provides diversification across large and mid-cap stocks, certain sectors or companies might dominate the index, leading to a higher concentration in those areas. If these sectors underperform, it could have an outsized impact on the overall fund performance.

• Economic and Sector-Specific Risks: The fund’s performance is closely tied to the economic health of India and the specific industries in which it invests. Any economic downturn in India or a decline in specific sectors represented in the index could negatively affect the fund's returns.

• Lack of Flexibility: In a passively managed index fund like the Mirae Asset Nifty LargeMidcap 250, the fund manager does not have the flexibility to make tactical decisions in response to market conditions. This lack of active intervention can be a drawback during times of market stress or in situations where specific companies or sectors are facing significant headwinds.

• Limited Downside Protection: Unlike actively managed funds that may take defensive positions during market corrections, the index fund will remain fully invested in line with the index. This means that during market downturns, the fund will experience the same level of decline as the index, with no mechanisms for downside protection.

• Foreign Investment Restrictions and Currency Fluctuations: While this fund is focused on Indian companies, certain external factors such as global economic conditions, foreign direct investment policies, or fluctuations in foreign exchange rates could impact large Indian companies that have international exposure, thereby affecting the fund.

• Potential for Underperformance in Strong Active Markets: During periods when actively managed funds outperform the broader market due to strategic stock selection, a passively managed index fund may underperform. This could lead to relatively lower returns compared to well-managed active funds.

Investors should carefully consider these risks and assess their own risk tolerance, investment horizon, and financial goals before investing in the Mirae Asset Nifty LargeMidcap 250 Index Fund - Direct (G).