Starting from October 10, 2023, Mirae Asset Emerging Bluechip Fund will allow Systematic Investment Plans (SIPs) of up to ₹25,000 per Permanent Account Number (PAN) per month. This modification has been officially communicated by the Asset Management Company (AMC) through Notice cum Addendum No. 49/2023, issued on October 3, 2023.
Both existing and new investors have the option to initiate a new SIP of up to ₹25,000, regardless of their previous installment amounts. This marks a significant increase from the previous limit of ₹2,500 in place since November 2020. The AMC has additionally furnished a comprehensive explanation for its decision to raise the limit.
According to Mirae Asset Mutual Fund, since November 2020, equities have achieved significant gains. As of September 30, 2023, the Nifty 50 Index, Nifty Midcap 150 Index, and Nifty Smallcap 250 Index have surged approximately 1.6 times, 2.2 times, and 2.4 times, respectively. This remarkable performance has occurred despite the equity markets enduring four major challenges over the past few years:
- COVID pandemic
- Elevated inflation leading to disruptions in global supply chains
- Geopolitical tensions, particularly the Russia-Ukraine conflict
- A sharp increase in interest rates
Compared to other economies, the Indian economy has displayed a relatively stronger ability to endure these challenges. The rise in Indian equities underscores the resilience and promise of the country’s economy. Looking ahead to the medium term, we maintain a positive outlook on equities and anticipate that India is poised to achieve substantial growth in the coming years. The International Monetary Fund (IMF) has forecasted India’s GDP to grow at an annual rate of 6.5 per cent from FY23 to FY27, positioning India as one of the world’s fastest-growing major economies.
Swarup Mohanty, Director & CEO, Mirae Asset Investment Managers (India), said, “With a strengthening macro environment, we have also witnessed significant growth in capital markets. Particularly, the midcap space has witnessed significant changes over the past few years. Our decision to modify the SIP subscription limit in the scheme has also been based on multiple factors like growth in market cap and liquidity, increase in aggregate profit pool, a more diverse universe with the listing of a new set of businesses, and consolidation in midcap space.”
Growth in market cap and liquidity: The cumulative market capitalisation of the Nifty Midcap 150 index has surged by approximately 120%, reaching Rs. 57.6 lakh crores from November 2020 to September 2023. Furthermore, market liquidity for mid-cap companies has shown substantial improvement, with the aggregate three-month average daily traded value (ADTV) increasing by roughly 70 per cent, soaring from Rs. 11,200 crores in November 2020 to Rs. 18,700 crores in September 2023.
Increase in aggregate profit pool: The total profit (Profit After Tax) of the Nifty Midcap 150 index has surged by approximately 170 per cent, reaching Rs. 2.17 lakh crores from November 2020 to September 2023.
More diverse universe with listing of new set of businesses: The mid-cap landscape has become more diverse, with the inclusion of over 45 new companies spanning various sectors such as financials, fintech, e-commerce, discretionary, chemicals, logistics, healthcare, real estate, retail, capital goods, and more over the past few years. Additionally, many mid-cap companies have experienced substantial growth, transforming into leaders in their respective industries, including building materials, footwear, diagnostics, EMS, industrials, media, fintech, and others.
Consolidation: Overall, mid-cap companies have profited from significant ongoing consolidation, primarily propelled by factors such as the implementation of GST, digital disruption, and the need for regulatory compliance, among others, as compared to the unorganised sector.
Mohanty also mentioned, “SIP is an investment tool through which one can invest systematically over a period of time which may help to accumulate wealth over a long period of time. The rupee cost-averaging effect of SIP balances out the cost of unit accumulation and equalises them over a long period, which lowers the effect of extreme fluctuations in price or market volatility. SIP investments done over the long term do not get impacted so much by the prevailing valuations.”
“Taking into consideration the above factors and with a view to providing meaningful participation to investors in the scheme without adversely impacting the interest of existing unitholders, we have decided to increase the subscription limit through SIP in Mirae Asset Emerging Bluechip Fund with effect from October 10, 2023,” added Mohanty.
According to the Addendum issued, fresh registrations for SIP will now permit a maximum amount of up to ₹25,000 on a monthly frequency, with the total aggregated across all available SIP dates within each month at the primary holder’s PAN level, as long as it is done before the applicable cut-off time on any business day.