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R.Y. Narayanan

As on October 31, the growth plan of BAF had an net asset value (NAV) of Rs 43.35 and it had more than 70,000 investors.

Coimbatore , Nov. 27

IN a move reflecting the expectations of the market players about the sustained health of the stock markets, Birla Sun Life Mutual Fund (BSLMF) has announced a string of record dates for dividend payments under its flagship scheme Birla Advantage Fund (BAF).

While it is common for some of the funds to announce the record date for dividend pay out well in advance to enable investors benefit from it, it is probably for the first time, a fund has announced at one go the record dates for three dividend pay outs over a four-month period.

BSLMF has also indicated that it has integrated certain `key learnings' post - 2000 market developments in its `investment process' and expressed confidence that the current rally is different from the earlier ones since it is not only broad based but also has depth.

In a communication to the investors, Mr Vikas Sachdeva, Head-Sales and Distribution, BSLMF, Mumbai, stated that while the first record date for dividend payment under BAF would be November 28, the second record date would be January 28, 2004 and the last record date March 12.

But he qualified his statement stating that `all dividend declarations would depend on the availability of distributable surplus in the scheme as on the record date'.

The fund, as at the end of October, had equity and equity related investments valued at Rs 451.03 crore with banks, steel, commodity chemicals, information and technology and consulting services, heavy electrical equipments, industrial conglomerates, automobile and oil and gas as some of the key sectors in which it has invested.

As on October 31, the growth plan of BAF had an net asset value (NAV) of Rs 43.35 and it had more than 70,000 investors.

Answering a query from Business Line on what made the BSLF to come out with such an announcement and whether the fund was confident of the market doing well in the near term, Mr Vikas Sachdeva said BAF has been doing `consistently well over the last few months and has been outperforming established benchmarks continuously'.

He said in line with the fund's established practice of booking profits and giving it to the investors in terms of dividends (Eg: like in the case of Birla Dividend Yield Plus), BSLMF had adopted this strategy.

He felt that declaring three dividend dates in advance should give `comfort to an investor', that whatever the state of the market, the fund manager would be regularly booking profits and controlling losses, if any.

As regards the market doing well in the near term, he expected the `Resurgent India Story' to be reflected in various FII allocations over a period of time. Notwithstanding the short term fluctuations in the market, the fund believed that `technicals will eventually catch up with strong fundamentals' .

Mr Vikas Sachdeva said he believed BSLMF is the first fund house to declare record dates for three dividends in advance and the intention is to `indeed reward all investors, who have stood by this fund through thick and thin'.

In his review on equities and the BAF, Mr Paras Adenwala, Head-Equities and Fund Manager-BAF, said the experiences of the bull run of the markets in late 1990s had taught several lessons such as keeping a close eye on valuations even if that meant short term under performance, booking profits, distributing profits, assigning higher weightages to stocks that have easy entry/exit and that quality of management and business was perhaps as important as profitable growth.

He said `we have integrated these key learnings in our investment process'.

He said the earlier peaks had P/E ratios that were at least double the current levels and the interest rates during the previous peaks were far higher than what they are today. Hence, in the view of the fund, this combination make equities more attractive as an investment alternative.

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