The Hindu Business Line : Birla Advantage Fund: Strong on capital goods

Birla Advantage Fund is an open-ended growth fund with the objective of achieving long-term growth of capital at relatively moderate levels of risk through a diversified investment strategy. Over past five years, the performance of the fund has matched its benchmark BSE Sensex.

The fund has a mandate to invest 70 per cent or less of its assets in equity during the volatile market phases, with the ability to move into debt. However, over the past three months, it has remained more or less fully invested in equity. Birla Advantage Fund’s assets under management expanded by 22 per cent to Rs 512 crore over the past year. We take a look at the churn in its portfolio between May-July 2007:

The fund has 47 stocks in its latest portfolio and the top ten account for 43 per cent of assets. Stock-specific exposures were pegged below 10 per cent. Capital goods continue to be the preferred sector for the fund despite a marginal cut in the exposure along with software and telecom services; together their weight in the portfolio was 39 per cent.

BEML moved out of the capital goods sector while Bharti Shipyard was added afresh to the portfolio. Exposure to Bharat Electronics and Thermax was pared. AIA Engineering, Larsen and Toubro and BHEL were accumulated.

With a marginal increase in allocation to software sector, Mphasis BFL stepped into the portfolio. Exposure to frontline stocks Infosys Technologies and Satyam Computer were enhanced. Telecom services underwent a minor rejig, exposure to Bharti Airtel was reduced, while Reliance Communication and recently listed Spice Communication were added to the portfolio.

Holdings in ITC, United Spirits and Hindustan Unilever were pruned. Dabur India was the lone stock added to the FMCG exposures.

The fund substantially reduced the exposure to Indian Overseas Bank and partially sold the shares of ICICI Bank and Axis Bank. Oriental Bank of Commerce was the new addition during this quarter.

The construction sector’s weight in the portfolio increased with addition of IVRCL, while holdings in Nagarjuna Construction was pared. In the pharma sector, GlaxoSmithkline Pharma and Dishman Pharma were reduced, and Nicholas Piramal entered the portfolio.

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