Birla Sun Life Dividend Yield Plus was launched in February 2003, with an objective to provide capital growth and income by investing primarily in a well-diversified portfolio of companies that have a relatively high dividend yield. The average assets under management of the fund for the quarter ended June was Rs 882 crore and showed an increase of 14 per cent over the previous quarter.
The fund is ranked Crisil fund rank one (top 10 percentile of the peer set) in the consistent performers equity category in the mutual fund ranking for the quarter ended June.
This category comprises a mixed bag of schemes from the large-, small- and mid-cap and infrastructure categories.
| SIP: ROBUST RETURNS | |||||
| Present Value (Rs) | Returns * (%) | ||||
| Period | Amount Invested | BSL Div Yield Plus | S&P CNX 500 | BSL Div Yield Plus | S&P CNX 500 |
| 2-year | 24,000 | 25,130 | 22,322 | 4.7 | -7.1 |
| 3-year | 36,000 | 49,226 | 40,910 | 22.0 | 8.7 |
| 5-year | 60,000 | 92,047 | 67,697 | 17.4 | 4.8 |
| 7-year | 84,000 | 153,547 | 114,820 | 17.1 | 8.9 |
| BSL is Birla Sun Life * Compounded annualised returns The amount invested assumes an investment of Rs 1,000 a month | |||||
| HIGH YIELDS | ||
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BSL Dividend | ||
Benchmark
PERFORMANCE
The fund has been able to generate impressive returns in the two-, three- and five-year time frames and has outperformed its benchmark (S&P CNX 500) and peers for the same time period with a significant margin. In the last one year, it has given lower negative returns (-nine per cent), as compared to its benchmark (-16 per cent) and peers (-14 per cent), which indicates the fund manager has relatively limited the downside.
Over the last two years, the fund delivered 15 per cent annualised returns in relation to two and six per cent of its benchmark and category, respectively.
In a monthly systematic investment plant (SIP) of Rs 1,000 for seven years, the total invested amount of Rs 84,000 would have grown to Rs 1,53,547, yielding an annualised return of 17.10 per cent. A similar SIP in the S&P CNX 500 Equity index would have grown to Rs 1,14,820, yielding only 8.87 per cent.
The fund has outperformed its benchmark for 12 out of the last 20 quarters. During the economic downturn in 2008, it limited its downside by giving lower negative returns compared to its benchmark.
INVESTMENT STYLE AND PORTFOLIO ANALYSIS
The fund invests in securities of companies that are traded at lower valuations. These have a high dividend yield and a potential to grow.
The fund has a price-to-earnings ratio of 14.81, lower than the benchmark's 22.47, and a dividend yield of 2.66 per cent, higher than the benchmark's 1.51 per cent. Both indicate the fund has a good and its investment style is in line with its objective.
The fund manager has taken active calls during various market phases, as observed during the volatile markets between June 2008 to May 2009, by increasing the average exposure to cash and cash-equivalents to nine from five per cent in the previous year.
The average equity exposure for the same period was reduced to 83 from 94 per cent in the last year. Post May 2009, the fund manager increased the exposure to 93 per cent till date.
Since January 2009, the fund has had an average exposure of 59 per cent in the small- and mid-cap stocks. The portfolio has diversified its risk by holding a higher number of stocks (73 in August), with the top 10 holdings constituting only 25 per cent. Diversification cushions against the poor performance of some stocks. The average number of stocks over the last two years was 63.
At the sector level, energy has been the most favoured over the last five years, with a 21 per cent average exposure, followed by financial services and consumer goods constituting the next largest sectoral exposures (18 percent each).
The stocks retained over the last three years, namely, GlaxoSmithKline Consumer Healthcare, HPCL and Oriental Bank of Commerce, have helped generate superior returns over the benchmark. Crisil Fund Services
