The Hindu Business Line : Birla MF churning sees more IT, less pharma exposure

BIRLA Advantage Fund (BAF), the flagship equity scheme from the Birla MF stable, has gone in for a sudden change in its sectoral allocation. It has reduced exposure to the pharmaceuticals sector and increased allocations to the information technology sector.

The changes in the BAF portfolio are also evident in the latest stock-selection strategy. Cipla, which was its top holding even two months ago, has been relegated to the thirteenth position as on February 28. Commanding the number one position currently is another pharma major, Dr Reddy's Labs.

The IT sector was the Rs 300-crore-plus fund's latest passion, sources with Birla MF maintained. In end-February, IT services accounted for 14 per cent of its net assets, tailing pharma (23 per cent) and FMCG (15 per cent). It had small exposures, about three per cent each, in the IT-enabled and IT hardware sectors. The fund's top-5, as on the Budget day, read thus: Dr Reddy's, Hero Honda, HPCL, Ranbaxy and Infosys.

According to BAF trackers, the two major surprises are Hero Honda and HPCL. It has been a steady rise for both stocks, especially HPCL. The refinery segment currently contributes a healthy 10 per cent to BAF's net assets.

The happenings at BAF have not gone unnoticed in MF circles, and analysts seem to be viewing its portfolio from a new angle. According to Mr Rahul Dhawan, analyst with SKP Securities, fund managers at Birla MF have taken a call on such PSU stocks as HPCL, BPCL and MTNL. Besides, there have been additions such as State Bank of India and Corporation Bank.

``The fund managers have been veryactive in bringing about these changes in the portfolio. They have pulled out of smaller holdings such as Archies, Pidilite, Birla 3M, Colgate and Glenmark,'' Mr Dhawan said, adding that the fund had picked up leading stocks from a number of critical sectors.

BAF, incidentally, seems to have disposed of one of its two unlisted equity holdings — Karrox Technologies. A company that operates in the IT training sector, Karrox, accounted for a marginal 0.08 per cent of the assets. The share of the other unlisted stock, Dharti Dredging, has remained unchanged.

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