Skip to main content

Mutual Fund Review: Birla Sun Life Advantage

 

 

Launched in February 1995, Birla Sun Life Advantage Fund is the oldest diversified equity mutual fund from the Birla Sun Life basket. However, the fund has been overtaken by its newer diversified equity siblings, both in terms of performance as well as growth in assets under management (AUM). Thus, notwithstanding its 15-year long existence, the fund has just about Rs 400 crore of AUM today.

PERFORMANCE

From being one of the top-performers in the late '90s to an average performer since early 2000, Birla Sun Life Advantage Fund has had an eventful record. In fact, in the past five years, the fund's performance has just been more or less at par with its benchmark index - the Sensex.


   In 2005, for instance, the fund returned about 43% against the Sensex gains of about 42% followed by a poor show in 2006 when it returned just about 34% against the Sensex returns of nearly 47% in that year. The fund, however, made a quick come back in 2007 when it outperformed the Sensex returns of about 47% by nearly 10 percentage points. However, despite outperforming the benchmark, it fell short of beating its peers, which, on an average, gave about 59% in 2007. Thus even though Birla Sun Life Advantage Fund has had a decent performance visà-vis its benchmark, the fact that it failed to outperform its peers in one of the most happening years of the decade relatively pushed down its rankings.


   Then again in 2008, the fund was received with yet another blow as it plummeted by more than 58% against the Sensex's decline of about 52%. Here again, at a negative return of 55%, the average decline by the category of diversified equity schemes was less than that of Birla Sun Life Advantage, pushing it down further in rankings and popularity charts.


   The fund, however, has not given up yet and in its attempt to build the blocks in its favour, it managed to return about 87% in the market recovery of last year against 81% returns posted by the Sensex. The diversified equity schemes, on an average, posted 84% gains last year. This year, the fund has so far returned about -5.2% since January against the Sensex returns of -6%.

PORTFOLIO

While the fund is benchmarked to Sensex, it is not an index fund and thus the fund manager has not restricted the portfolio of this fund to Sensex stocks alone. In fact, the fund's latest portfolio composition - as on April 30 2010 - has just about 44% of AUM invested in the Sensex stocks. The fund's beta is thus higher than that of the Sensex. At its current beta of 1.05, Birla Sun Life Advantage's portfolio is 5% more volatile than that of the market. This amply proves the fund's marginal outperformance vis-à-vis the markets in the bullish years and underperformance in the sluggish years.


   As far as the stock composition is concerned, high beta sectors like financial and engineering dominate the fund's portfolio currently while the most popular and in-demand sectors - healthcare and FMCG together account for just about 9% of the fund's equity composition. Within the healthcare sector, the fund has exposure in Dishman Pharma, Cipla and Pfizer. Unfortunately, the portfolio clearly misses out on outperformers such as Lupin and Sun Pharma.


   While most of the fund's current holdings have been invested into in 2009, some like RIL, BHEL and L&T are over four years old. The fund has clearly profited from the advantage of long-term holding in these two stocks, especially, in BHEL and L&T, which have grown multifold since the time they was first acquired by the fund. Its other highly profitable long term investments include - TCS, Infosys, ICICI Bank, United Spirits and Thermax. As such, 82% of the fund's equity portfolio is in the profit zone.

OUR VIEW

Based on its performance so far, Birla Sun Life Advantage can be rated as an average performer whose returns are more or less aligned with that of the market. Investors of this fund can thus satiate their appetite with returns as good or bad as the market. However, those seeking outstanding returns can consider other large-cap equity schemes like the Frontline Equity from the same fund house which has proven to be far better performer than Advantage.

 


Popular posts from this blog

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...
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