Investing in Emerging Bluechip Funds: SIP vs Lumpsum and Future Prospects
Every 10th of the month, the Mirae Asset Emerging Bluechip Fund opens for new SIP (Systematic Investment Plan) investments and does not accept lumpsum investments. This article explores the decision-making behind this policy, the potential benefits or drawbacks of this approach, and other investment opportunities in the emerging fund category.
Mirae Asset Bluechip Emerging Fund: Only SIPs Allowed
Investors in the Mirae Asset Emerging Bluechip Fund should note that SIPs are the only option for new investments, while lumpsum investments are not allowed. According to fund managers, it is generally better to invest in equity mutual funds through systematic investment plans (SIPs) or systematic transfer plans (STPs).
As of now, new SIPs can be initiated in this fund. Investors who want to invest in equity mutual funds do have several other good categories to choose from, as the returns from emerging fund categories have not been as impressive over the last three years. Other similar funds, such as the LT Emerging Businesses Fund, DSP Blackrock Microcap Fund, and HDFC Small Cap Fund, are also strong contenders.
No Specific Timeline for Reopening: Fund Manager's Decisions
The decision to stop new lumpsum investments is not unusual, especially in high-performing mid-cap and small-cap funds like the ones mentioned. Fund managers make this call to protect the interests of existing investors. When the Asset Under Management (AUM) becomes too large, it can become challenging to maintain the fund's performance, leading to a decrease in returns for all investors. Therefore, fund managers often begin by stopping new lumpsum investments and, at a later stage, may also prevent new SIPs.
The cessation of new investments can continue indefinitely, and while there is no clear timeline for reopening, investors should not wait or hold their investments. Instead, they should explore other options in the emerging category that may offer better prospects or stability.
Other Investment Opportunities in Emerging Funds
While the Mirae Asset Emerging Bluechip Fund may remain closed to new lumpsums and SIPs indefinitely, there is no specific time period for suspending new investments. Instead of waiting, consider investing in other similar emerging funds. For instance, the LT Emerging Businesses Fund, DSP Blackrock Microcap Fund, and HDFC Small Cap Fund are high-performing and could offer better returns in the long term.
It is always prudent to diversify your investment portfolio across different categories and funds. This strategy helps mitigate risk and can lead to better overall returns.
Conclusion
Investing in the Mirae Asset Emerging Bluechip Fund with lumpsums is currently not allowed, but new SIPs can be initiated. Exploring other similar funds in the emerging category can provide better returns and more flexibility. Remember that asset size can significantly impact fund performance, and fund managers have the authority to limit new investments to protect investor interests.
Begin your investments now and stay informed about the market to make the best decisions for your financial future.