Aditya Birla Sun Life MF launches thematic fund betting on top Indian conglomerates

The New Fund Offer (NFO) will remain open from December 5, to December 19, 2024.

Aditya Birla Sun Life Mutual Fund has announced the launch of Aditya Birla Sun Life Conglomerate Fund, an open-ended diversified equity fund scheme following a conglomerate theme.

The New Fund Offer (NFO) will remain open from December 5, to December 19, 2024.

This is the first active fund in India that will follow the theme of investing in top conglomerates.

The good narrative behind this strategy is that most of these businesses are owned by large groups, which have been tested through many market cycles.

Conglomerates are vast, multi-generational enterprises that wield significant influence over the daily lives of billions of people.

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This first active fund will invest in groups domiciled in India with at least two listed companies across different sectors. The invested companies will be characterized by their diversified business operations across multiple sectors, strong market positions and the ability to generate sustainable cash flows.

According to the fund house, the success of conglomerates often lies in their ability to adapt and innovate, strategically investing in emerging, high-growth industries, often referred to as sunrise sectors. By doing so, conglomerates not only sustain their market relevance but also help shape the future of global business and consumer trends.

Commenting on the new fund launch, A. Balasubramanian, Managing Director and CEO, Aditya Birla Sun Life AMC, said, "In India, conglomerates have played a pivotal role in driving the nation's industrial revolution, forming the backbone of its economic progress. Defined by resilience, multi-generational legacies, and a remarkable capacity for innovation across diverse industries, these businesses have consistently adapted to market cycles, created diversified cash flows, and spearheaded investments in emerging sectors like green energy and digital ecosystems.”

Aditya Birla Sun Life Conglomerate Fund will offer investment opportunities across 169 companies in 22 sectors, representing 33 percent of the total BSE market capitalization. The fund includes a diverse mix of 36 large-cap, 30 mid-cap, and 103 small-cap stocks, providing broad growth potential and sectoral diversity for investors.

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Kunal Sangoi and Harish Krishnan would be fund managers for Aditya Birla Sun Life Conglomerate Fund, which is benchmarked against the BSE Select Business Groups Index Total Return Index.

Notably, Tata Mutual Fund had recently launched a passively managed Tata BSE Business Group Index Fund, which also tracks the BSE Select Business Groups index.

The key difference between the benchmark and Aditya Birla Sun Life Conglomerate Fund is that the latter will have a higher tilt towards mid-cap and small-cap companies.

Further, the benchmark has seven business groups included in the fund -- Tata Group, Reliance Industries, Adani Group, Aditya Birla Group, L&T, Jindal Group, and Mahindra Group.

However, the Aditya Birla Sun Life Conglomerate Fund will have an investible universe of more than 30 business groups.

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