The Hindu Business Line : Birla Midcap: Defensive cover

Midcap stocks have demonstrated their volatile characteristics over the past six months. Year to date, this category as a whole lost substantially. Several schemes have seen their NAVs touch 52-week lows. Here’s a look how Birla Midcap Fund managed its portfolio over the six-month period ended May.

The fund’s NAV corrected by 20 per cent, and assets under management lost 4 per cent. This implies that the fund had fresh inflows during this period. With the market correcting further, several sectors lost market fancy. Birla Midcap too preferred to churn its portfolio according to market movements.

Capital goods, cement, media and entertainment and non-ferrous metals were trimmed in the portfolio. As a defensive bet exposures to consumer non-durables, pharma, software, consumer durables, auto and fertiliser were stepped up.

In consumer non-durables, the fund added to the existing levels in ITC, Shaw Wallace and Triveni Engineering. Marico and Balrampur Chini Mills were the new faces, and United Spirits was sold completely.

Anticipating a correction in banking space the fund reduced exposures to Union Bank of India, Indian Overseas Bank and ING Vysya Bank. Ahead of correction the fund partly sold its holdings in Indian Bank and accumulated the same during May.

Dena Bank and Centurion Bank of Punjab moved out. In financial services the fund moved out of India Infoline, Indiabulls Financial Services and Crisil.

It was a mixed bag in capital goods, with Havells India, Crompton Greaves and Thermax retained, year to date without a change, but with a contrarian view in Bharat Bijlee, Jyoti Structures and Bharat Electronics.

The construction sector has undergone an upheaval in the past six months. Several stocks hit their 52-week lows.

The fund had the faith in Simplex Infrastructure and retained the holdings without a change. Akuri City and Hindustan Construction shares were sold partially. Using the steep correction as an opportunity the fund accumulated IVRCL Infrastructure and Projects.

With the inclusion of the IT sector, Tata Consultancy Services and Tech Mahindra were added. Glenmark Pharmaceuticals was the lone representative in the pharma space.

Exposure to ferrous metals was reduced, with Monnet Ispat and Welspun Gujarat Stahl Rohren pruned.

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