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Investors can retain their investments in Birla Sun Life Basic Industries. Its consistent performance over the three- and five-year periods makes it a good investment choice.
There was, however, a change in the scheme's management in November, warranting a wait and watch approach before committing any fresh investment.
The portfolio has not witnessed any major shuffling in stocks or sectors for now, indicating that it may continue to follow a similar strategy. The fund's objective is to invest in companies sensitive to economic and commodity cycles also termed as cyclical companies. The portfolio appears to be a mixture of value and growth stocks.
Suitability: Since the fund prefers to invest in cyclical stocks its performance depends on its ability to identify stocks/sectors that are on an uptrend. Hence, the fund is suitable for investors with above-average risk appetite.
Performance: With a one-year return of 78 per cent, the fund has outpaced its benchmark BSE-200 by 11 percentage points. It has registered strong performance over a five-year period.
On a monthly return basis over the past 24 months, the fund trailed its benchmark only nine times, reflecting fairly consistent performance.
Investors who opted for a systematic investment plan (SIP) would have earned fifty percentage points more than those who made a lump-sum investment, over a one-year time-frame.
An investor who chose the SIP route since inception would have earned a compound annual return of 50 per cent as against 37 per cent through one-time investment (as of December 2007).
Profile: The fund has witnessed some outflows over the past year. Despite a surge in the NAV the fund's assets under management witnessed a decline of 18 per cent.
With a compact asset size, the fund has managed to build a well-diversified portfolio 41 stocks. Exposure to any single stock is pegged at less than 7 per cent of the portfolio.
Sector exposure however appeared less diversified with the top three sectors cornering close to 47 per cent of the assets. Capital goods continued to account for one-fifth of the assets. The NAV per unit is Rs 120.6.
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