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Mutual Fund Review: BIRLA SUN LIFE MID CAP

 

One of the major issues in the mid-cap space is liquidity. The fund manager of Birla Sun Life Mid Cap recognises this and limits exposure to single stocks to five per cent. The fund has a large-cap limit of 25 per cent, which it had touched before the March 2009 rally began. However, in the next few months, large-caps were reduced to a meagre one per cent. This helped the fund deliver 120 per cent in 2009 (category average, 97 per cent).

The fund hasnt been a top-notch performer all the time. Launched in 2003, it made its mark only in 2006. In 2007 and 2008, the managers sector calls helped the fund deliver returns in line with its category and benchmark.

The portfolio is churned frequently. But, the fund isnt aggressive, as the manager avoids concentrated bets. For the past five years, no sector has breached the 25 per cent mark and no stock has gone beyond seven per cent. The portfolio, currently at 53 stocks, may appear bloated at times, but the manager puts it down to portfolio transition and the time it takes to shift between themes.

Overall, the fund stays in good stead in bull runs, as well as bear phases. It takes full advantage of market rallies, yet manages to curtail losses in downturns. Over the long term, it has never disappointed investors. The funds fiveyear annualised return, as on April 30, was 27 per cent, six per cent more than its category average

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