101738  |  INF209K01405  |  3 star  |  Neutral

NAV

$ 179.46

1-Day Total Return

0.52
%
INR | NAV as of 18/12/2017 10:30:00 | 1-Day Return as of 18 Dec 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

10.7 bil

Expenses

2.49%

Fee Level

--

Turnover

73%

Status

Open

Min. Inv.

1,000

30-Day SEC Yield

--

Category

Flexicap

Investment Style

Large Blend
Author
Morningstar's Take | 25/12/2016
by Kavitha Krishnan

Satyabrata Mohanty replaced Naysar Shah at the fund’s helm in July 2015; Vineet Maloo has comanaged the fund since January 2014. Mohanty doubles up as AMC’s head of mixed assets and manages a total of nine funds including this one. He has more than 17 years with the Birla group and prior research experience. While the fund has continued to follow the mandate and remain true to label, the processes have undergone a slight change given the different styles of the individual managers who led this fund in the past. This has muted our level of confidence on this fund.

Mohanty focuses on investing in growth-oriented stocks with a dividend yield at least 1 times that of the CNX Nifty Index. From among the stocks qualifying on the dividend yield criteria, Mohanty invests in businesses that have a competitive advantage, steady growth, stable free cash flow, low equity dilution, and steady dividend payouts. Mohanty pays more heed to the portfolio dividend yield, rather than that of individual holdings. As a result, he does not mind holding on to a stock even if its dividend yield falls below the threshold so long as its earnings growth and ROIC are greater than the broader market rates. He is not valuation-conscious in the strictest sense and exits a company only when its fundamentals have deteriorated.

The process has been tweaked more than once to make the criteria for picking stocks more liberal. This material change in the fund’s strategy to being more growth-oriented also resulted in a decrease in the fund’s large-cap allocation. Mohanty’s strategy is not significantly different as compared with Shah's. However, given the brevity of Mohanty’s track record with this fund, we would to monitor it over a longer term before we build more conviction.

The fund’s performance under Mohanty has remained average. Mohanty’s fairly short track record on this fund and the multiple manager changes that it has witnessed in the past lead us to a Morningstar Analyst Rating of Neutral.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

The manager invests in growth stocks that meet the dividend yield threshold.

People

Satyabrata Mohanty is an old timer at Birla, but we’d like to monitor his capabilities in the fund management space.

Parent

We think Birla Sun Life AMC has been witnessing a lot of traction and stands out in many aspects.

Process

A focus on high-dividend paying stocks that generate free cash flow and a high ROIC.

Performance

Given the brevity of the manager’s tenure here, we would like to observe over a longer period.

Price

The fund’s expense ratio is lower than that of the median of the category.

Important Disclosures

Unless stated otherwise, this report was prepared by the person(s) noted in their capacity as Manager Research Analysts (i.e., fund analysts) employed by Morningstar, Inc., or one of its affiliates. It has not been made available to the issuer prior to publication.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Manager Research Analysts’ expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness.

No material interests are held by Morningstar or the Manager Research Analyst in the financial products that are the subject of the research reports or the product issuer. Regarding Morningstar’s conflicts of interest: 1) Manager Research Analysts’ compensation is derived from Morningstar’s overall earnings and consists of salary, bonus and in some cases restricted stock; however, Manager Research Analysts are neither allowed to participate directly or try to influence Morningstar’s investment management group’s business arrangements nor allow employees from the investment management group to participate or influence the analysis or opinion prepared by them. Further information on Morningstar’s Code of Ethics policies is available from http://corporate.morningstar.com/us/asp/subject.aspx?xmlfile=540.xml

Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission.

For Recipients in India: Research on securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (“Investment Research”) is prepared by Morningstar Investment Adviser India Private Limited, which is registered with the Securities and Exchange Board of India. Your access to the Investment Research does not establish an advisory relationship with Morningstar Investment Adviser India. You should seek the advice of a financial professional before making an investment decision to ensure, among other things, that the security is suitable based on your particular needs and circumstances.

For Registered users only indicates the feature is available for Registered users only.
Top
Mutual Fund Tools
Feedback