The Hindu Business Line : Birla Sun Life MF unveils close-ended equity fund

MR GARY COMERFORD, Director, Birla Sun Life AMC Ltd, with Mr A. Balasubramanium, CIO, at a press conference held in Mumbai on Thursday. - Paul Noronha

Mumbai , Aug. 03

Birla Sun Life Mutual Fund unveiled its five-year close-ended equity fund, Birla Long Term Advantage Fund, on Thursday.

The fund aims at providing long-term capital appreciation by investing predominantly in a diversified portfolio of equity and equity-related securities. It would consist of a portfolio of reasonably priced stocks that are expected to post attractive growth in three to five years.

Maximising returns

Speaking at the launch, Mr Gary Comerford, Director of Birla Mutual Fund, said, "This five-year closed-ended equity fund is particularly aimed at those investors who want to maximise returns without being worried over volatile stock markets."

The new fund offer opens on August 7 and closes on September 8. The fund offers two plans — dividend and growth. There is no entry or exit load, however, investors who redeem before the maturity period, will bear unamortised expenses of the issue expenses on the applicable net asset value.

"The probability of positive returns in five-year periods in equity has been 87 per cent while for one year it has been 63 per cent. Thus five-year period will give huge consolidated returns," said Mr Raghvendra Nath, Vice President - Marketing and Strategy.

Volatile market

When invested in a long-term five-year closed ended fund, the intervening volatility of the stock markets does not impact as long as the markets perform over the five-year horizon. Moreover, in an upward trending market, investing in a closed-ended fund prevents one from encashing too early and thereby miss the larger rally.

The fund will follow the bottom-up approach to build a quality portfolio and manage it. It would not follow any style bias and would invest in under-priced opportunities in all segments of the market. The fund will use derivatives up to 50 per cent of the portfolio assets and use it for hedging during volatile times to minimise risk. The benchmark index for the fund is the BSE Sensex.