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KNOW YOUR FUND MANAGER

A Balasubramanian, CIO, Birla Sun Life Mutual Fund, believes in buy-and-hold, but does not hesitate in making money from short and medium term opportunities.

It is not common to find fund managers who follow a top down investing style. A Balasubramanian, chief investment officer, Birla Sun Life AMC, is one such exception.

"Everybody cannot be a Warren Buffett, but you could have 'your' approach," he feels. His approach is picking stocks top down, where he takes a macro call based on the dynamics of a sector and then searches for companies within the sector.

He selects companies in which he can believe in the management and its ability to deliver. "Once companies are filtered on these basis, I evaluate the financial performance. This evaluation need not necessarily be of the past performance. It is more of your forecast for the coming years, especially based on the certain assumptions and options that are achievable, then I zero down on my ideas," he says.

According to the 39-year old Bala, as he is known in the mutual fund industry, apart from sitting on some stocks for the long term as part of his buy-and-hold strategy, it is also imperative to avail of the opportunities arising in the short to medium term. "This will ultimately drive the portfolio's performance and enable it to give superior returns as compared to the market," he adds. 
 

A BALASUBRAMANIAN'S PERFORMANCE
	Annualised  Return (%) *
Birla SunLife Balanced Fund	26.00
Crisil Balanced Fund Index (Benchmark)	17.38
Birla SunLife MIP	11.17
Crisil MIP Blended Index (Benchmark)	9.65
* between July 2002 and Aug 2004

At present, he is bullish on sectors like telecom, cement, metals, engineering and construction along with concept stocks in retail and media. The macro outlook and sectors seems appealing to Balasubramanian.

On the current valuations of these stocks, he says, "If the outlook remains positive, the stocks are bound to do well and may remain expensive also. In such a scenario, valuations should not be an area of concern or a major risk factor."

Another area of interest to him is companies where value unlocking could happen in the form of multiple business activities especially at a time when the entire economy is growing. "We have in the past benefited from the companies like McDowell, Taj GVK and Bajaj Auto due to their other business activities," he mentions.

He is presently neutral on the sectors like textiles and chemicals because as he puts it: "One does not know how things could turn out and is not sure about growth rates either."

This complete workaholic says, "In the short term, volatility is bound to be there as markets are tracking the sentiment prevailing in the commodity markets and increasing oil prices."

Balasubramanian is highly positive about the long term though, "Everything--economic numbers, corporate results, ability to sustain the growth rate, global investors' outlook on India--backs my view positively," he says. He likes to be customer focused and wants people to benefit from investments using various mutual fund products.

"Today, there is an urgency among people to invest in the markets, create big wealth if one has to beat inflation. When investors are open to pay their insurance premium on month-on- month or quarter-on-quarter basis, why can't they go for mutual funds? It gives more returns over a long period of time. They can use mutual funds as long term saving vehicles. They can look at investing continuously through SIPs (Systematic investment planning)," which is similar to paying insurance premium every month or every quarter, he says.

"In case of insurance, you are covering risks. You just cannot keep on paying a risk premium, some amount of investments has to be there," he adds.

"This is where penetration helps. The industry needs to go more retail. It needs to increase level of communication from the investment angle," he says on the mutual fund industry. "If the right kind of approach is adopted, then the entire working population could eventually be holding mutual fund products," he added.

Balasubramanian is part of the original team at Birla Sun Life AMC where he joined as chief dealer. He has moved up the ranks within the company right from being in charge of trading in both debt and equity, a member of the business develpoment team, heading the fixed income group and managing hybrid schemes.

He started his career in Canbank Financial Services and moved later to GIC Mutual Fund before joining Birla Mutal in 1995.

This 'not so ambitious' individual believes in simplicity and being approachable. He feels the ability to network is his strength. This firm believer of team work currently heads a twenty member team consisting of three equity portfolio managers, six analysts and remaining fixed income analysts .

When he headed the fixed income group, its balanced fund scaled up three ranks from CPR 5 (Crisil's Composite Performance Rank) to CPR 2 in just a year. He likes keeping a low profile. "Be ethical and true to yourself," is his mantra. "Do your work with dedication and maintain a lot of integrity," he adds.