Skip to main content

Birla Sun Life Medium Term Plan

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)
 

Birla MF Medium Term Plan

 

The repo rate cut by RBI would send most funds hunting for opportunities in the interest rate curve. But if you wish to look at a less tapped area in the debt market for potential returns then you should probably look at credit opportunities. Birla sun Life Medium Term Plan (Birla MTP) offers such a strategy.

With a return of 9 per cent in the last three years, this fund has been in the top quartile of the performance chart of income funds. But given that its portfolio maturity has mostly been short-term since its launch so far, a comparison with short-term fund category may be more appropriate. This showcases the fund in the top three list.


More recently, its one year return of 11.3 per cent also places it in the top 10 of the income category.

Features


Birla MTP started off as a regular short-term fund three years ago but decided to seek opportunities in the credit space. Hence in March-April 2012, it hiked its exit load to 730 days (2% for exits before 365 days and 1% if redeemed between 365 to 730 days) thereby allowing it to move to the new strategy. While this did lead to some institutional money exiting, the fund has grown its asset size since.

How does increasing exit load help? One, the fund's core portfolio (about 40%) will mostly comprise of non-AAA rated instruments that will be held to maturity. That means, there would be no trading or price risk. But to do this the fund should not have undue redemption pressure. Higher exit load will reduce such liquidity pressures.

The interest on the instrument would accrue and be passed on as NAV gains to investors. The rest of the portfolio (60%) will remain liquid and also traded if need be.

Now, non-AAA does not mean poor quality of credit. This could be an area of mis-priced credit or short-term financing requirements not met by capital markets. Currently close to 20% of the portfolio comprises of instruments with less than AA ratings.

How does the fund mitigate the risk inherent in lower-rated instruments? One, it builds covenants and structures in some instruments, that can safeguard it, wherever needed. Two, although the fund can invest with an average tenure of 2-2.5 years, it has mostly held its average maturity to less than a year. Lower period reduces risks of uncertainty relating to the credit worthiness of the instruments.

Given the current low in the economy and corporate performance, this could be a good time for the fund to pick up plenty of temporarily mis-priced instruments and those waiting to be upgraded.

Suitability


Birla MTP's returns do not come without risks; which is why we would not recommend it for a core portfolio. The fund is suitable for investors wanting higher returns within the debt category, with additional risks. For instance, you will be better off investing in the fund than look for unrated corporate fixed deposit schemes that promise high returns.

Still, the fund can at best form a small proportion of such an individual's portfolio. Given the higher period of exit load, small lump sums would be suitable for investments.

Investing now (before March 31) would provide you with capital gains indexation benefits of 3 years, even if you exit after 2 years.

Given its exit load, Birla MTP may seem almost like a FMP. Only, it is much more actively managed than an FMP, given that it has more liquid papers and is also likely to actively scout for opportunities as it remains open ended. Returns, therefore, can be expected to be superior to FMPs with similar tenure.

Performance


In the last one year, Birla MTP returned as much as another fund that looks at mispriced credit opportunities – Templeton India Corporate Bond Opportunities. But the latter is a more recent fund.

The key difference is their holding is the average maturity. Templeton currently has a portfolio maturity of 2.84 years as against just 0.83 years of Birla MTP. Templeton, in fact, has an exit load of up to 900 days in its fund as a result of its higher average holding period.

Birla MTP has beaten its benchmark almost always on a rolling one-year return since its launch. While the average outperformance over the benchmark has been little less than 1 percentage point over the life of the fund, the margin of outperformance has gone up in the last one year.

Since, the fund changed it strategy, it has, on an average, outperformed the benchmark by 2 percentage points and as high as 3 percentage points. That is clearly the reward for higher risks.

Birla MTP currently has a yield to maturity of 10.29%. The fund is managed by Rohit Murarka from January 2013. He was earlier part of the research team, when Maneesh Dangi (now Co-CIO) was managing this fund.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.
Read more

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli
Read more

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis
Read more

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l
Read more

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
Read more
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