• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Shanthi Venkataraman

INVESTORS can retain their holdings in Birla Equity Plan. The tax-saving fund has been among the better performing funds over the past year as well, having generated a return of about 40 per cent. As is the case with most tax-saving funds, its returns over a one-year period have been better than that of its diversified counterpart, Birla Advantage Fund.

Tax-saving funds such as HDFC Taxsaver and HDFC Long Term Advantage have, over the past year, turned in returns of about 62 per cent and 48 per cent respectively. These funds have also delivered a stronger performance over a three-year period. Their superior performance could partly be explained by their bias towards mid-cap stocks.

Given the current volatility of the market, however, investors need not consider fresh investments into this fund for now.

Suitability: The fund tends to take focused exposures to sectors, which increases its risk profile. The portfolio, however, has a blend of large- and mid-cap stocks, which makes it conservative in stock selection vis-à-vis funds such as HDFC Long Term Advantage or PruICICI Taxplan, which are predominantly mid-cap oriented.

Performance: Birla Equity has delivered an annual return of about 50 per cent over the past three years. It has not, however, consistently topped the charts. After taking a beating in 2000 and 2001, it recovered in 2002 and substantially outperformed the market and most of its peers in 2003.

In 2004, while it did beat the benchmark indices, its return of about 20 per cent was modest compared to the top-performing funds.

The fund has, however, handled correction phases better in recent years. The fund outpaced most other diversified funds in the first quarter of 2005. While most funds turned in negative returns, Birla Equity emerged among the top performing funds with its return of more than 5 per cent.

Portfolio overview: The banking and pharmaceutical sectors have enjoyed the fund's favour for a long time. These two sectors account for more than 30 per cent of its assets. The holdings within these sectors are, however, spread over a number of stocks.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ABCs of commodities trading

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line