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

ICICI Prudential Dynamic Plan Invest Online

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   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...

About CRISIL IPO Grading

CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, or a comm...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

Capital Protection Oriented Funds

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   Capital Protection Oriented Funds   Erosion of capital is one of the key concerns for investors wanting to invest in equity mutual funds. To address this concern, asset management companies have launched Capital Protection Oriented Funds (CPOFs). What are CPOFs? CPOFs are generally three to five-year, closed-ended funds where 70-80% of the portfolio is invested in fixed income securities, which mature on or before the scheme's tenure. The investment in fixed income securities grows to 100% at the end of the tenure, providing the investor with capital protection. The remaining portion (20-30%) is used to take exposure to equity, which provides the upside. Exposure to equities is either by directly buying equity stocks (plain vanilla CPOFs) or by b...
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