Great ability to sense opportunities and time the market

FUND ANALYSIS: Birla Equity Planner

Birla Equity Plan has come a long way since its inception in February 1999 to emerge as a category-beating fund. Barring one year of 2004, the fund has consistently beaten the category returns over the past five years.

The fund manager churns the portfolio quite aggressively. He moves swiftly in and out of sectors spotting opportunities and strategically timing his entry and exit. Good stock picks have in fact become the unique selling proposition of Birla Equity Plan. For instance, picks such as Automobile Corporation of Goa have delivered significant returns for the fund at a time when the automobile and auto ancillary sector was been in the grip of bears. In fact, the fund has maintained its position in the automobile sector at a high of 13 per cent through this bear phase while the average category exposure to the sector has hovered around 7 per cent. Even at the end of May 2007, its exposure to the sector was at 13 per cent plus.

The fund has displayed an uncanny ability to sense an opportunity at the right time. It did so during the third quarter of 2006 by timing his entry in the banking stocks to perfection.

In spite of such a churn, the volatility in returns is below average, which is commendable. The fund manager prefers to hold a small portfolio of around 35 stocks in which he invests with conviction. Moreover each of these holdings accounts for over 1 per cent of the portfolio. This in turn means that each stock has a significant impact on fund's returns. Even in terms of sectors, the fund is concentrated--over half of its investments are in four sectors.

So far 2007 looks good for the fund "� the year to date return as on June 8 stood at 8 per cent compared to the category average 4.11 per cent. Another refreshing difference in the portfolio is the lower than average allocation to the technology sector. For those of you who have a tech heavy portfolio and are looking for an ELSS fund to balance such a discrepancy can definitely look at Birla Equity Plan.