Skip to main content

Birla Sun Life GenNext Fund

 

Birla Sun Life GenNext's focus on consumption-driven sectors has worked in a downturn only. The fund needs some spark to make it an all-weather choice for Generation Next



BIRLA Sun Life GenNext, launched in July 2005, sounds quite exclusive in the heap of diversified equity schemes. The fund, however, is very much akin to Kotak Lifestyle and invests in companies which are expected to benefit from rising consumerism in India. The success of these funds usually hinges on the high disposable income in the hands of the India's young generation and what they do with their income. Hence the name – Generation Next (GenNext)

PERFORMANCE:

India has emerged as one of the world's fastest growing economy. However, consumption has played only a minor role in it. According to figures by CSO, GDP growth in the country has been largely led by unprecedented expansion in the investment space while the share of consumption in the economy has been on a decline. A few items in consumer basket like telecom services and personal transport have, however, shown a speedy growth. The story, now, has a slight twist lent by the fiscal stimulus and the sixth-pay commission, which have put more money in the hands of consumers. It now remains to be seen whether the recent revival in consumption related stocks turns out to be stable or just momentary. 

   Birla Sun Life GenNext, whose core investment philosophy is consumption, has so far delivered a commendable performance only in the downturn. In rallies, however, the performance is probably just about average. In 2006, for example, the fund managed to return just about 27% against the Sensex and the Nifty returns of about 47% and 40%, respectively. In 2007, while Birla Sun Life GenNext's 58% returns did outperform the Sensex and the Nifty returns of about 47% and 55%, respectively, it was placed far below the average of the other diversified equity schemes then. 

   In 2008 the fund did relatively better than most of its peers. The market meltdown that eroded the returns of the Sensex and the Nifty by about 52%, saw Birla Sun Life GenNext fall by about 48% in that year. The fund was, thus, successful in justifying its low beta of about 0.77. (A beat is a measure of volatility of a portfolio vis-à-vis the market as a whole. A beta less than 1 thus indicates that the portfolio is less volatile than the markets.) In the current calendar year, while the markets have seen a good run-up and the Sensex and the Nifty have returned about 77% and 73%, respectively, GenNext has returned only about 56% since January to date.

PORTFOLIO:

Given its consumption orientation, GenNext has an exposure of about 26% in consumer goods sector alone. Other prominent sectors in its portfolio include Media and Entertainment, Financial Services and Auto, among others. The fund has, however, restricted its stock holdings to an average of about 30 stocks at a point of time. Given the fund's small size of just about Rs 94 crore, this diversification by and large appears quite apt. 

   However, what surprises about GenNext is the proactive churning of its portfolio. Despite being heavy on sectors like consumer goods and media, that take time to realise earnings, a majority of the fund's current holdings are less than a year old. 

   Fortunately, for the fund, some of its picks rightly timed at the beginning of the rally have yielded decent returns. These include stocks like Marico, Yes Bank, Dabur, Bajaj Auto and HT Media among others. Vigorous returns by the media and entertainment sector in the last few months also explains the fund's fancy for this sector in recent times. 

   At the same time, some of its picks like Onmobile Global, S Kumars Nationwide and TV 18 are yet to yield returns. Most of these stocks are, however, recently acquired and it would be interesting to see if the fund manager would prefer to hold unto them till they recover cost or churn the portfolio in favour of some other picks.

OUR VIEW:

Despite its defensive strategy, Birla Sun Life GenNext needs some spark that can truly make it a fund apt for the Generation Next. Nonetheless, one cannot expect extraordinary returns from consumption-based funds in the short term, though they may yield good returns over a longer duration, provided they adopt a long-term investment strategy. Notwithstanding the fund's ability to curtail the risk in the downturn, investors have better options like Frontline Equity and Dividend Yield Plus to choose from the Birla Sun Life basket.

 


Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now