The Hindu Business Line : Birla Sun Life Equity: Invest

EXPOSURES may be considered in Birla Sun Life Equity Fund, as its performance continues to be good; it also has a portfolio, whose stance is likely to stand it in good stead over the next six-to-twelve months. This fund was earlier known as Alliance Equity Fund and it is now under the auspices of Birla Sun Life Mutual.

This was the only equity fund in the Alliance Mutual stable that managed to maintain its good track record following the exit or Mr Samir Arora, Chief Investment Officer a few years ago.

It has maintained its record under the new management, too. The fund has comfortably outpaced its benchmark, the BSE-200 and most diversified funds.

In this backdrop, we maintain our positive view of Birla Sun Life Equity; we had recommended a `buy' twice last year; our latest call was after the change in ownership was announced. Investors could take exposures using a systematic investment plan, as it will ensure that funds are not locked in at one level and enable them to capitalise on any weakness in the broad market.

Stocks from the engineering and banking sectors are the preferred holdings; they account for about 45 per cent of assets. This tilt is likely to pay off, as these sectors appear well placed to consolidate on the gains of the past three years. The business prospects are less vulnerable to any downturn in the economy.

The fund has also focused on frontline stocks in these sectors; this approach could help, if equities go through a choppy period. Large-cap stocks now dominate the portfolio.

Several stocks that figure in the portfolio may appear richly valued, but they appear to hold promise, especially over a one-to-two year period. Siemens, Larsen & Toubro, Infosys, SBI, Pantaloon Retail and Bharti Tele-Ventures are instances.

The small asset base of about Rs 300 crore is also likely to help the fund, as it will provide for a high degree of flexibility in portfolio management.

Suitability: The risks associated with the fund are in line with what one would expect in diversified funds.

The returns have been attractive and have adequately compensated for the risks involved. We will not, however, recommend this fund as a priority for a portfolio of funds.

If you already have exposures to funds such as Franklin Prima, Magnum Contra, HDFC Equity, HDFC TaxSaver and HDFC Top 200, this fund could be considered to complement the portfolio. A smaller share of the corpus could be allocated to this fund.

Fund facts: The fund was launched in August 1998 and came under Birla Sun Life Mutual last year.

The minimum investment is Rs 5,000. The entry load is 2.25 per cent. There is no exit load. Mr Mahesh Patil is the fund manager.

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