| Type |
Open ended equity (diversified)
|
Benchmark |
S&P CNX Nifty
|
| Min. Investment |
Rs 5,000 |
Face Value |
Rs 10 |
| Entry Load |
2.25% (maximum) |
Exit Load |
1.00%* |
| Issue Opens |
August 30, 2005 |
Issue Closes |
September 28, 2005 |
| *On exit within 6 months from date of allotment |
Birla Top 100 Fund seeks to provide medium to long-term capital appreciation, by investing predominantly in a diversified portfolio of equity and equity related securities of top 100 companies as measured by market capitalization.
| |
Birla Top 100 Fund (BTF) is a predominantly large cap fund. It aims to benefit from the stabilising influence that large caps tend to provide to an equity portfolio. To that end, the premise for launching such a fund is sound, although we believe Birla Advantage Fund does that job well enough for Birla Mutual Fund.
Large cap stocks are certainly more stable and predictable compared to their mid cap peers. Such companies have a reputation for consistency and stability built on a track record that individuals can identify with. The long-term performance of such companies inspires confidence in the investor and there are relatively fewer surprises in store for him. Given the potential of such companies, it makes imminent sense to participate in their growth through a predominantly large cap fund to that end
Having said that, we believe investors should first consider existing predominantly large cap funds with established track records. Names that come to mind are Franklin Bluechip (a true blue large cap fund), HDFC Equity (pre-dominantly large cap) and Principal Growth Fund (pre-dominantly large cap).
|
BTF's investment strategy is relatively straightforward. It seeks to ride the potential of large cap stocks. Large cap stocks include the top 100 stocks by market capitalisation. At least 65% of the fund's net assets would be invested in this category. The balance 35% can be invested in other stocks.
| Instruments |
Allocation range |
Normal range |
| Equity and equity-related securities out of which, |
80%-100% |
90% |
| Top 100 market cap companies |
65%-100% |
70% |
| Other companies |
0%-35% |
20% |
| Money market instruments |
0%-20% |
10% |
The fund has made its intention clear to outperform the benchmark index by "taking focused exposures in a compact basket", hence we are likely to see BTF take concentrated sectoral bets and actively manage its portfolio. This is also in line with how a lot of Birla Mutual Fund's equity-oriented funds are managed.
|
Mr.Nishid Shah is the Chief Investment Officer (CIO) - Birla Sun Life Mutual Fund and has over 20 years of experience in the financial services industry. Before joining Birla AMC he was associated with Motilal Oswal Securities as Chief - Equity Research. Prior to that, he worked with A. F. Ferguson, Lovelock & Lewes, Coopers & Lybrand and Rhone Poulenc (India) Ltd. He manages Birla Advantage, Birla Midcap, Birla Equity Plan and Birla MNC among other funds.
|
Since BTF aims to be predominantly invested in large cap stocks, its performance is likely to reflect the traits associated with large caps - consistency and stability. To the extent of the investments outside the top 100 stocks (capped at 35% of net assets), there could be some surprises, either pleasant or unpleasant, depending on how well the fund manager uses this flexibility. Regardless, investors should expect a degree of volatility in the BTF's performance given its resolve to make aggressive investment calls to boost growth.
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