Birla Sun Life Top 100: INVEST :: Business Line

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The ability to weather volatility and sustain outperformance even during correcting markets makes Birla Sun Life Top 100 a good investment option to consider from a three- to five-year perspective.

Right sector choices and stock picks helped the fund outshine its benchmark, CNX Nifty, across all time-frames. The fund managed to clock returns higher than the peers in its category over a one-, three- and five-year period.

STEADY PERFORMANCE

The fund scores high on consistency, too. In the last five years, the fund’s performance has been better than its benchmark 89 per cent of the time. It has also managed to beat peer funds — DSP BlackRock Top 100 and UTI Top 100.

Its mandate to restrict to the top 100 stocks by market capitalisation also helped the fund contain downsides during falling markets. For instance, during the period January 2008-March 2009, even as the Nifty slid over 55 per cent, the fund managed to arrest the fall in its NAV to 52 per cent.

Similarly, between November 2010 and December 2011, the fund was successful in curtailing downside at 24 per cent while the Nifty lost over 27 per cent during the same period. Its strategy to move into safe haven themes such as pharma and consumers during such correction phases shielded the fund’s NAV. In addition to getting the sector choices right, the fund’s ability to choose the best quality stocks supported performance.

For instance, the fund’s move to increase exposure to stocks such as Hindustan Unilever, Nestle India, ITC, Sun Pharma and Dr Reddy’s paid rich dividends.

HIGHER RETURNS

During recovery phases, the fund has managed to garner returns higher than its benchmark. For instance, between December 2011 and January 2013, the fund clocked 38 per cent gains, higher than the 32 per cent jump in the Nifty. Higher allocation to financials and auto stocks aided performance.

Increasing allocation to bank stocks such as YES Bank, IndusInd Bank and Axis Bank, which gained between 85 and 120 per cent during this period, lifted the fund performance.

Similarly, auto stocks such as Tata Motors–DVR and Motherson Sumi almost doubled during the period. A systematic monthly investment of Rs 1,000 in the fund over the last five years would have fetched annual returns in excess of 10.5 per cent. The fund had 53 stocks in its portfolio at end-September with a weighted average market cap of over Rs 83,000 crore. Higher skew to IT and consumer stocks gives a defensive tint to the fund, which will help it tide volatility.