When it comes to investing in equity mutual funds, the biggest concern that an investor has is the risk. Birla Sun Life Advantage Fund belongs to the large and mid-cap equity category where it invests in companies, which belong to a sector with high potential and have stable management.
In order to reduce the element of risk for the investor, there are some strategies followed by the fund, which ensure that the downside is limited during the bear market phase. The upside is also limited during a boom phase as it has a lower exposure to mid and small cap companies.
If you are an investor who has a long-term financial goal to achieve, you may consider this fund. It offers growth with stability and income (if you opt for the dividend payout option). The fund is offered by the Aditya Birla Group, which has extensive experience in equity and debt management.
The Birla Sun Life Advantage Fund is an open-ended equity fund, primarily investing in large and mid-cap companies.
If you are trying to achieve long-term growth of capital with moderate levels of risk, then you must consider this fund. The investments in the large and mid-cap companies are made after diversified research has been conducted.
You can expect long-term capital growth with income. The portfolio consists of equity and equity-related instruments, along with debt and money market instruments.
The Net Asset Value, which is calculated by deducting the liabilities from the assets and dividing it by the total units, as on 30th August 2019 was Rs. 373.
The objective of the scheme is to achieve long-term growth of capital, at relatively moderate levels of risk through a diversified research based investment in Large & Midcap companies.
This product is specially designed for investors seeking Long term capital growth and income investment predominantly in equity and equity related securities as well as debt and money market instruments Birla Sun Life Advantage Fund is an equity fund, which primarily invests in large and mid-cap companies. Investments are backed by strong research.
You can expect capital appreciation and income if you stay invested in this fund for the long term.
Here are some of the key features of the Birla Sun Life Advantage Fund, which gives you an idea about the background of this fund.
This open-ended fund was first available to individual investors on February 25, 1995.
Entry load was a certain percentage of your investments that was deducted when you invested in mutual funds for the first time. This charge, however, has been abolished by the Securities Exchange Board of India (SEBI). Hence, there is no entry load for investments made into this fund.
An exit load is levied if you withdraw your funds before a certain period of time. If you withdraw funds before the completion of a year, your exit load would be 1% of the market value of your investments. If you withdraw your investments after the completion of one year or 365 days, the exit load is nil.
If you are investing in this fund for the first time, the minimum investment amount is Rs. 1000 or multiples of Re. 1. For existing investors, you can make additional investments into the scheme with the minimum amount being Rs. 1000 and in multiples of Re. 1 thereafter.
If you want to invest in this fund through the systematic investment plan or SIP route, the minimum value of each SIP is Rs. 1000 and you need to pay at least six installments.
This fund has been managed by Mr. Satyabrata Mohanty, a seasoned fund manager, who has been with the Aditya Birla Group of companies for more than 17 years. He has extensive experience in the financial sector, with a focus on financial research. He is an expert on managing equity and debt funds, trading and credit research.
This 24-year old fund has generated annualised returns of 16.78% since inception, and you can start investing in this fund with just Rs. 1000/-.
| Fund | 1 yr | 3 yr | 5 yr | Since inception |
|---|---|---|---|---|
| Birla Sun Life Advantage Fund | -16.2% | 2.09% | 9.26% | 16.28% |
The Birla Sun Life Advantage Fund is predominantly for people seeking equity-related securities, as well as debt and money market instruments. It has more than 50% investment in large cap companies, more than 40% in mid cap companies and around 5% in small cap companies. It is heavily weighted towards the banking sector, with 30% of its top holdings invested in banks. Here are the top holdings of this fund.
| Sector | Companies |
|---|---|
| Automotive | Hero Motorcorp, Maruti Suzuki, TVS Motor, etc |
| Hero Motorcorp, Maruti Suzuki, TVS Motor, etc | HDFC Bank, State Bank of India, Housing Development, Financial Corporation, etc. |
| Cement and construction | Ambuja Cements, Ramco Cements, Dalmia Bharat, etc |
| Chemicals and Pharmaceuticals | Asian Paints, UPL, Berger Paints, etc. |
| Consumer Durables and non-Durables | Consumer Durables and non-Durables |
| Engineering and Capital goods | L&T, BEML, and Engineers India, etc. |
| Manufacturing | KPR Mill, Bharat Electronics, Max Financial, etc. |
| Oil and Gas | Petronet LNG, Indraprastha Gas, Hindustan Petroleum Corporation Ltd, etc. |
| Miscellaneous | Voltas, Britannia, Titan, etc. |
There are several reasons why investing in the Birla Sun Life Advantage Fund makes sense. The reasons are as follows.
The fund has been launched by the Aditya Birla Group, which has extensive experience in the financial services sector and the fund has been in existence for more than 24 years. In order to assess the performance of an equity fund, it should have at least a five to seven years record so that it can be assessed for its performance. The fund manager has been with the fund for more than eight years, and he has more than twelve years of experience in equity and debt fund management.
Mutual funds with more than 65% invested in equity are classified as 'equity mutual funds.' Equity mutual funds are more tax-efficient compared to other categories of mutual funds.
If you redeem the fund within a year, it is considered to be a short-term capital gain. If you hold it for more than a year, it is considered a long-term capital gain.
When it comes to long-term capital gains, the first Rs. 1 lakh is exempt. The balance will be taxed at 10%.
There are several investment options, and you could choose the option which suits you the best. If you require regular income, you could opt for the dividend option, either payout of dividend or reinvestment. If you choose this option, then the NAV will fall to the extent of the dividend declared.
On the other hand, if you have a stable income from other sources, you can go for the growth option. Under this option, you can just expect capital appreciation as no dividends are paid.
You can choose to invest through two plans, the direct plan and the regular plan. If you are new to investments and would like to take the help of an adviser, then it is better to invest through the adviser. This is known as the regular plan.
If, however, you are an experienced investor and are confident of your decisions, you can go for the direct plan where you get a higher NAV and lower expense ratio.
While equity mutual funds generate the highest return over the long run compared to other asset classes like debt, real estate or gold, they come with their fair share of risks.
In order to ensure that your risk is mitigated or reduced, there are certain strategies employed by the fund.
Market risk occurs due to volatility in the stock market and this results in severe fluctuations in your investments. To try and protect your investments to a possible extent, this fund adopts a multi-cap approach, where your investments are spread through the large cap, mid cap, and small cap companies.
Liquidity risk refers to the sudden withdrawal or redemption of funds by investors during the bear market phase. Selling equity in the portfolio during this time would result in losses. To not let this happen, a small portion of the fund is invested in debt and money market instruments which are more stable.
Under-performance risk occurs when the fund invested by companies do not perform according to expectations. In order to overcome this risk, the fund invests in companies with strong management and belonging to a high-performance sector.
The fund has outperformed the large and mid-cap equity category when it comes to five-year, seven-year, and ten-year returns. It has been a consistent performer since inception generating annualised returns of 16.8%.
The documents which would be required for investing in the Birla Sun Life Advantage Fund are:
You will need to fill in your personal information like your name, address, and other communication details here. Details like your annual income and whether you are a salaried professional or businessman and so on will require to be filled up.
The fund name will have to be filled up stating whether you want to opt for a direct or regular plan. The growth or dividend option also needs to be checked.
If you are interested in starting a SIP, then a form for SIP needs to be filled up. You will need to enter the start date and last date, along with the SIP amount.
If you want an electronic transfer directly from a bank, then the ECS form needs to be filled up as well.
Every mutual fund investment requires a KYC form or know your investor form to be filled up. This is required for verification of PAN. A passport size photograph will be required along with this. If you have already completed your KYC compliance, then the KYC acknowledgement will have to be submitted.
The documents which are acceptable as proof of identity are PAN card, Aadhaar card, passport, Voter's ID, or driver's license.
Aadhaar card, driving license, passport, Voter ID card, sale agreement of residence, flat maintenance bill, bank account statement, or passbook are acceptable proofs of address.
A lump sum amount or SIP amount as per the option is chosen by you need to accompany the application. For online investments, cheques are not required.
If you are investing on behalf of your minor child, then this form needs to be filled up.
In case of companies, Hindu Undivided Families (HUF), the following documents will be required: Certificate of incorporation, Memorandum and Articles of association, address proof, Resolution of Board of Directors for the investment, signatures of authorised persons, deed of declaration for HUF, and Power of Attorney.
This might seem like a very lengthy process, but you have to comply with it just when you invest for the first time in the fund. Subsequent investments will be completely hassle-free!
