Good sector calls, right moves changed fortunes

FUND ANALYSIS: Birla Equity Plan

This relatively small-sized equity-linked savings scheme has shown the ability to identify trends and make swift moves to generate good returns. Its annualised five-year returns of over 52 per cent ranks it at the ninth place of the 23 funds in the category.

However, the fund has not been a category-beater since inception. The first two years, after its launch in 1999, turned out to be quite unnerving for investors. With more than half of its assets committed to tech stocks, the fund lost heavily in 2000 and 2001.

But by the end of 2001, its fortunes started to change. Good sector calls, coupled with the ability to sense the opportunities and make apt moves helped the fund emerge as a good tax-planning fund. For example, its bet on banking and technology stocks during the last two quarters of 2002 paid rich dividends.

The year 2003 was exceptional as the fund gave a return of 161 per cent. A quick dash in select chemicals, energy and metal stocks helped the fund post superb performance in the second quarter of 2003, and propelled it to the top of the category.

The fund again displayed its ability to sense an opportunity at the right time during the third quarter of 2006. The fund manager timed his entry in the banking stocks to perfection, and benefited immensely.

The fund prefers to hold a small portfolio of around 31 stocks in which it invests with conviction. Services is the top sector for the fund, where it has invested around 17 per cent of its assets.

Technology sector, where the fund's holding accounted for less than 5 per cent in September and October 2006, now occupies 12 per cent of its portfolio. Concor and Aditya Birla Nuvo are the top holdings of the fund.

The fund added NIIT Technologies, Asian Hotels, Tata Motors, Satyam Computers, Larsen and Tubro and Sobha Developers to its portfolio in December.