Aditya Birla Sun Life Business Cycle Fund REVIEW


Aditya Birla Sun Life has launched Business Cycle Fund NFO which is open for subscription on November 15, 2021. It is an open-ended equity scheme. It will focus on riding the business cycle through dynamic allocation between different sectors and stocks at different stages of the business cycle in the economy

INVESTMENT OBJECTIVE

The investment objective of the scheme is to provide long term capital appreciation by investing predominantly in equity and equity related securities with a focus on riding business cycles through dynamic allocation between various sectors and stocks at different stages of business cycles in the economy.

INVESTMENT STRATEGY

The Fund would follow top down approach of portfolio construction to identify stage of business cycle, sector opportunities and subsequently using bottom up approach identify strong companies within those sectors.

The Scheme would aim to deploy the business cycle approach in investing by identifying economic trends and investing in the sectors and stocks that are likely to outperform at any given stage of business cycle. The fund manager will consider economic parameters (like Current Account Deficit, fiscal deficit, interest rates, inflation), investment indicators (like investment in capex, new projects cleared, etc.), business and consumer sentiment (purchasing manager index, business confidence index, sales of various consumer discretionary products, etc.) to decide on the expansion or contraction phase. For instance, during the early expansion phase, cyclical stocks tend to outperform. In the contraction period, the defensive groups or sectors that are less sensitive to changes in overall economic activity like healthcare, consumer staples, etc. outperform because of their stable cash flows and dividend yields.

BENCHMARK

The performance of the scheme will be benchmarked to the performance of S&P BSE 500 TRI).

ASSET ALLOCATION

Under normal circumstances, the asset allocation of the Scheme will be as follows:

Instruments

Risk profile

Normal Allocation (% of total Assets)

Equity & Equity related instruments selected on the basis of business cycle

High

80% - 100%

Other Equity & Equity related instruments

High

0% - 20%

Debt and Money Market Instruments

Low to Medium

0% - 20%

Units issued by REITs & InvITs

Medium to High

​0% - 10%

NFO Issue Details

Scheme Opens

15-Nov-21

Scheme Closes

29-Nov-21

Scheme reopens for continuous purchase/sale

Within 5 working days

Minimum Lumpsum

Rs 500

​Minimum SIP

Rs 100 for 6 months

NAV of the fund

Rs 10 during NFO period

Entry Load

Nil

Exit Load

1% if redeemed within 1 year

Risk

Very High Risk

Benchmark

S&P BSE 500 TRI

Fund Manager

Mr. Vineet Maloo and Mr. Nitesh Jain

Performance of existing Multicap Funds

Here is the performance of some existing business cycle funds. This would give an idea to investors on how these funds have performed in medium to long term. Returns indicated here are annualized returns.

Fund Name

​3 Mth Ret ( % )

6 Mth Ret ( % )

1 Yr Ret ( % )

3 Yr Ret ( % )

L&T Business Cycles Fund

12.57

26.38

56.59

18.56

ICICI Pru Business Cycle Fund

​11.38

20.53

-

-

Tata Business Cycle Fund

8.57

-

-