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Mutual Fund Review: Birla Sunlife Income Fund


Type: Debt Income
Fund Manger: Navneet Munot
Launch Date: 3rd March, 1997

The current inflation rate in the Indian economy clearly signals to the over heated conditions of the markets, with the inflation touching a two year high of 6.12% in the last month, dropping back and again rising to a high of 6.11%, the market is jittery about the next policy of the Central Bank. The Reserve Bank of India also looks worried about the inflation and in a move to curb the excess liquidity in the markets; it raised the repo rate by 25 bps in its last third quarter Monetary Policy review last month, along with other measures and by this move the central bank has tried to make the money costlier in order to cut down of the excess money supply in the market.

In these times when the inflation is on a high, and there is increased interest arte volatility, investors are parking their money in the shorter –term debt schemes to earn a return over a short period of time. However certain debt products in other categories have put up some impressive performance. In the debt income category Birla Sunlife Income Fund has performed well and has given an absolute return of 2.23% over the last 3 months and 4.91% over the last 6 months. The scheme has been a consistent performer over the last one year and according to the returns over the last year it stands second in its category. The absolute return over the year was 7.75% whereas the peer group average was 5.12%. Its benchmark index, Crisil Short-Term Bond Fund Index managed to give an absolute return of 5.95% during the same period.

Birla Sunlife Income fund has been in existence since March, 1997 and since it's inception has grown at a CAGR of almost 10 %. Over a period of 5 years, the fund holds a rank of 5 in its peer group returning a CAGR of 6.83%. It manages a corpus of Rs.33.66 crore which has not seen much movement in the last one year.

A major portion of the portfolio is invested in Treasury Bills and Corporate Bonds. Treasury Bills make almost 45.79% of the portfolio whereas Corporate Bonds have a smaller portion of 22.94% in the total portfolio. 20.77% of the portfolio is in cash holdings and the rest 10.5% is invested in Securitized instruments. The scheme has invested around 28.23% of its portfolio in finance sector followed by current assets and power generation sector. The fund manager has invested the portfolio heavily into sovereign instruments and bonds with AAA ratings. Around 45.79% of the portfolio is invested in sovereign instruments whereas around 43.74% is placed in bonds with AAA bonds. The fund manager has done a major shift to the portfolio as the holding of sovereign instruments has gone up by 17.24% which were 28.55% a month ago.

Birla Mutual Fund has seen an increase in its assets under management by Rs 4135.48 crore over the month of January, 2007, and majority of this increase has come from the debt and the liquid schemes. With the kind of increase mentioned above the schemes offered by the fund house looks good for future investments. Though the corpus size Birla Sunlife Income Fund may not seem as a very lucrative fund but looking at the kind of performance of the scheme over the last few months and also a decent track record since inception the scheme looks good for future investments.

 

 

Scheme Name

1 Year

Rank as per 1 Year

DBS Chola Income Plus - Growth

24.7164

1

ABN AMRO Flexi Debt Fund - Growth

8.7544

2

Birla SunLife Income Fund - Growth

7.7483

3

Birla SunLife Income Fund - 54EB - Growth

7.7480

4

Birla SunLife Income Fund - 54EA - Growth

7.7478

5

 

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Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

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