Aditya Birla Sun Life Top 100 Fund: Scores high on risk management, returns

Launched in October 2005, Aditya Birla Sun Life Top 100 Fund is classified under the large cap category of CRISIL Mutual Fund Ranking. It has featured in the top 30 percentile (CRISIL Fund Rank 1 or 2) in the past 12 quarters ended June 2017.
 
The fund aims to provide capital appreciation over medium-to-long term, by investing predominantly in a diversified portfolio of equity and equity-related securities of top 100 companies, by market capitalisation. The fund is managed by Mahesh Patil. It had a quarterly average assets under management of Rs 3,249 crore at the end of September 2017 quarter.
 

Consistent outperformance
 
The fund has consistently outdone the category (funds ranked under the large cap category in June 2017 CRISIL Mutual Fund Ranking) and the benchmark (Nifty 50) by significant margins across timeframes under analysis.
 
Evaluation of the fund's performance over various market phases shows it has proved its worth with the ability to contain the downside better than peers during all bear phases under analysis. It performed well in the European crisis (January 2011 to June 2013), generating positive returns in contrast to negative returns posted by the category and the benchmark.
 
An investment of Rs 1,000 in the fund on October 24, 2005 (inception of the fund) would have grown more than five times to Rs 5,638 on October 9, 2017, generating annualised return of 15.55 per cent, outperforming  both the benchmark (Rs 4,171; 12.68 per cent) and the category (Rs 5,270; 14.90 per cent).
 
Systematic investment plan (SIP) is a disciplined approach of investment, which helps investors to tide over the market uncertainties by investing small amounts at regular intervals. Aditya Birla Sun Life Top 100 Fund has generated higher returns in SIP compared to its benchmark in all periods.
 

Portfolio analysis
 
In the past three years, the fund had exposure to 129 stocks across 28 sectors, with average holding of 69 stocks compared with the category's average of 43 stocks, which indicates relatively higher degree of diversification for better risk management.
 
The top five sectors constituted 58 per cent of the equity portfolio in three years, in which banks dominated with 23.79 per cent exposure followed by software (11.27 per cent), pharmaceuticals (8.40 per cent), automobile (7.89 per cent) and finance (7.13 per cent).
 
Banking, petroleum products and finance have been the top contributing sectors to the fund's returns for the past three years. Performance of banking space can be attributed to the fund manager's winning bet on HDFC Bank, YES Bank, IndusInd Bank and Kotak Mahindra Bank. Indian Oil, Reliance Industries and Hindustan Petroleum were the top performers in petroleum products. Bajaj Finserv boosted the performance of the fund's finance sector by giving more than five times returns in the past 3 years. Out of 25 consistently held stocks, 16 outperformed the benchmark during the holding period, which helped the fund to outperform its benchmark and peers during various time frames. 

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CRISIL Research