Financial Daily from THE HINDU group of publications
Sunday, Dec 04, 2005
Financial Daily from THE HINDU group of publications Sunday, Dec 04, 2005 |
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Investment World
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Mutual Funds Markets - Mutual Funds Birla Equity Vidya Bala
EQUITY-linked savings schemes (ELSS) or tax benefit funds have the dual aim of capital appreciation through investing in equity instruments and providing tax incentives as well. The three-year lock-in period may help earn returns over time, ignoring short-term slumps. Such funds suit equity investors with a long-term view. We take a look how Birla Sun Life Mutual Fund managed its Birla Equity Plan in August to October 2005. Birla Equity Plan is an open-ended equity-linked savings scheme that aims at capital appreciation with focus on long-term fundamentally-driven values. As of October 2005, the top ten holdings accounted for 43 per cent of the net asset value. Taj GVK Hotels & Resorts replaced State Bank of India in the top spot. The stock had an allocation of 6 per cent in the fund's portfolio. The entry of Indian Petrochemicals Corporation and Gokaldas Exports marked fresh exposure to the chemical and textile sectors respectively. The fund also doubled its allocation to the software sector. Buying in frontline IT stocks such as Satyam Computer Services and Tata Consultancy Services increased the sector's weight from 6.7 per cent in July to 12.5 per cent in October. Mid-cap player Subex Systems, however, made an exit. Media lost favour, as the fund sold its holdings in Deccan Chronicle. The fund remained overweight on the consumer goods sector despite some pruning. Macmillan, SPL industries and Colgate Palmolive exited the portfolio. The fund adopted a cautious approach to banking stocks and reduced exposures to the sector from 14.5 per cent to 9.5 per cent over the three-month period. The sector also saw some restructuring. Punjab National Bank and Bank of India replaced Canara Bank and Union Bank of India. Exposure to auto ancillaries was reduced by 2 per cent with the exit from Omax Auto. Infrastructure Development Finance Company was a new addition. Birla Equity Plan increased its cash and current assets by 2 per cent.
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