Birla Sun Life Frontline Equity: Steady largecap performer

Birla Sun Life Frontline Equity fund is meant for investors who want exposure to large caps and who are in search of consistent performance over a longer time period. Looking at the nature of its performance over the past several years, expert Arnav Pandya says that it can be considered as a core holding in the portfolio.

Birla Sun Life Frontline Equity Fund

Nature: Open ended Equity oriented

Assets under Management: Rs 2884 crore as on September 2011

Inception:  August 2002

Fund manager:  Mahesh Patil

Analysis

• The fund focuses on large cap stocks and it had the highest exposure to petroleum products at 10 per cent of the portfolio at the end of March 2009. The next two sectors in terms of exposure were banks and software. At this point of time nearly 20 per cent of the portfolio was in cash and cash equivalents. Reliance Industries had the highest exposure in the portfolio and Bharti, Infosys and ONGC were some of the other stocks in the top holdings list. The fund was an outperformer over its benchmark the BSE 200 over all time periods since its inception. It though had a high turnover ratio of 3.96.

• At the end of September 2009 there was a change in the situation as banks were now the top sector followed by software and petroleum products. The funds cash and cash equivalents had dropped to less than 3 per cent of the portfolio. Reliance Industries continued to be the top holding of the fund and it maintained its strong outperformance over all time periods. 

• Six months later banks still had the highest exposure in the portfolio with nearly 15 per cent share. This was followed by software, power and industrial capital goods.  While Reliance Industries remained the top holding in the fund others like ICICI Bank, SBI and TCS made their presence felt with an entry into the top 5 holdings. The fund had slowly increased its exposure to some mid cap stocks and on the performance charts it still remained an outperformer over all time periods.

• By the end of September 2010 the exposure to banks increased even further to nearly 20 per cent of the portfolio. This was followed by software and industrial capital goods. ITC was now the top holding in the fund followed by Reliance Industries and TCS. What is significant is that even as the corpus of the fund has increased steadily it has managed to ensure that the outperformance was also maintained.

• The fund managed to ensure that it stays an outperformer over all time periods and this situation was maintained even at the end of March 2011. The top holding of the fund was once again Reliance Industries followed by ICICI Bank, Infosys, ITC and Bharti Airtel.  The fund continued to maintain an exposure to the mid cap area and this is paying good dividends for its investors.

• At the end of October 2011 there was a change in its portfolio as the fund had Infosys as the top holding followed by ITC and Reliance Industries. All the top 10 holdings remained large caps though there was a change in their individual positions. The fund remains a consistent outperformer over its benchmark for all time periods since inception.

• This fund is meant for investors who want exposure to large caps and who are in search of consistent performance over a longer time period. Looking at the nature of its performance over the past several years this can be considered as a core holding in the portfolio.

Disclaimer: Views expressed in this article are entirely personal.
arnavpandya@hotmail.com.

For full details of the fund including NAV performance, portfolio, and peer comparison click here.