Birla Sun Life Monthly Income Plan

 

Birla Sun Life (BSL) Monthly Income Plan is a hybrid fund that primarily invests in debt instruments with small exposure to equity securities up to 15% of total net assets. Launched in August 1999, this fund is a pioneer in the Monthly Income Plan Conservative category and maintains the largest AUM in this category with an average asset size of Rs 614 cr as of the quarter ended September 2011. The fund is ranked CRISIL Fund Rank 1 (top 10 percentile of the peer set) over the past seven quarters.

 

Performance

 

The fund has managed to outperform its benchmark (CRISIL MIPEX) and peers during the past one year, three years and five years (Chart 1). Over a five-year term, the fund has delivered annualised returns of over 8% as against 7% by peers for the same period and 6.3% by the benchmark. Further, in a 10-year period, the scheme has given over 10% returns versus 8% for its peers.

 

The duration of the debt portfolio has been actively managed by the fund manager at various interest rate movements across time intervals in the past four years. Reducing the duration when yields are hardening, enables the portfolio to deliver better returns and vice versa.

 

Chart 2 shows the movement of the fund's average maturity along with the 10-year gilt yield and peers' average maturity. The manager has actively adjusted the maturity of the fund with the increasing yields at various time intervals. When compared with the peer group, BSL Monthly Income Plan has done a relatively aggressive management of the average maturity, thereby enabling the fund to deliver superior returns than its peers.

 

Consistent Dividend Pay-Outs

 

The fund has distributed dividends in 137 out of the last 145 months, indicating its consistency in terms of regular dividend pay-outs. Dividend payments were missed mainly in the sluggish market phase, i.e. in 2000 and 2008. The average dividend yield of fund over this period is 0.79% against peer average of 0.52%.

 

Fund Manager Profile

 

Satyabrata Mohanty (Fund Manager for Debt Portfolio) is a CA and holds a CFA degree. He has more than 12 years of experience and is engaged with Birla SunLife AMC for past four years.

 

Nishit Dholakia (Fund Manager for Equity Portfolio) - is a CA and has over 11 years of experience in equity research and fund management. He is with Birla Sun Life AMC for past eight years.

 

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