Launched in August 2002, Birla Sun Life Frontline Equity Fund is classified under the large cap category of CRISIL Mutual Fund Ranking. It has been ranked in the top 30 percentile (CRISIL Fund rank 1 or 2) over the past six consecutive quarters as of September 2016.
The fund aims to provide investors with long term growth of capital, by aiming at being as diversified across various industries as its chosen benchmark index, S&P BSE 200. Managed by Mahesh Patil, the fund had quarter average assets under management of Rs 13,314 crore at the end of September 2016 quarter.
Consistent outperformance
Over the past five years, Birla Sun Life Frontline Equity Fund has constantly bettered the category (funds ranked under the large cap category in September 2016 CRISIL Mutual Fund Ranking) and the benchmark — S&P BSE 200 — across all time frames under analysis. The fund’s trailing five-year performance delivered annualised returns of 17.13 per cent, surpassing the category’s 14.17 per cent and the benchmark's 11.76 per cent.
The fund has delivered higher returns than the category and benchmark since the Subprime crisis phase (January 2007-March 2009). During the Chinese slowdown (March 2015- October 2016), it returned 5.21 per cent annually against the category's 3.15 per cent and the benchmark's 1.30 per cent.
An investment of Rs 1,000 in the fund on August 30, 2002 (inception of the fund) would have grown more than 18 times to Rs 18,304 on October 28, 2016, at an annualised rate of 22.77 per cent. A similar investment in the category and the benchmark would have grown to around Rs 15,246 (21.19 per cent) and Rs 9,940 (17.59 per cent), respectively.
Similarly, Rs 1,000 invested per month in the fund over the past 10 years via systematic investment plan (SIP) totalling Rs 1.2 lakh would have grown to Rs 267,285 by October 28, 2016 at 15.31 per cent annualised returns.
In comparison, a similar amount invested in the benchmark would have returned Rs 205,004 at 10.33 per cent.
Portfolio analysis
In September 2016, the fund had a well-diversified portfolio, with equity exposure to 78 stocks across 23 sectors. The top 10 stocks formed 37.94 per cent of the fund's equity portfolio.
Over the past three years ended September 2016, the top five sectors, on average, constituted 57.83 per cent of the portfolio. Over this period, the banking sector, on average, had the highest exposure of 22.08 per cent followed by software (12.25 per cent), consumer non-durables (8.43 per cent), pharmaceuticals (7.07 per cent) and auto (6.85 per cent).
The fund has consistently held 37 stocks for the past three years, accounting for almost 70 per cent of the fund's overall portfolio. Top holdings among the consistently held stocks include HDFC Bank, ICICI Bank, Infosys, ITC and Reliance Industries.
