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Birla Balance Fund

Dhirendra Kumar

Birla Balance Fund is an open-end balance fund with a minority debt allocation ranging between 25-50 per cent. While, entry into the fund is without any load, the fund carries an exit load of 2 per cent for redemption within two years. After two years, there is no exit load. The fund in its tenure of nine months has given a return of 22.5 per cent.

Launched in September 1999, the fund picked up huge investments in infotech sector giving itself a heady start. The rally in the sector led the fund to gradually increase its holdings in IT to 51 per cent and squeezed its debt investment to 17 per cent in February 2000. The fund touched a high net asset value (NAV) of Rs 18.41 as on March 7, 2000 just before the downturn in the sector pushed the fund to take a hit of 42 per cent to a low of Rs 10.67.

Even though the fund sought to cushion the volatility in the sector with a higher exposure to debt (41 per cent as on May 31, 2000), the fund witnessed a fall of 29 per cent against an average fall in the category of 20.45 per cent for the three months ending May 31, 2000. However, with the infotech sector rising once again in June, the fund gained 8 per cent.

As on June 30, 2000, the fund has a 37 per cent allocation to debt but the equity portfolio continues to tilt in favour of the infotech sector with 46 per cent exposure and other sectoral holdings as pharma (6 %) and FMCG (4.5%). The fund has concentrated bets in the infotech stocks like Infosys (17.65%), VisualSoft (9%) and SSI (8.6%).

Despite one-third of its corpus in debt, the fund will be susceptible to higher volatility compared to its peers due to a concentration in few stocks in a single sector.

Fund Basics
Objective	Size (Cr)	NAV: 10/7/2000	Exit Price	Entry Price	Total Returns (%)
Balanced Fund	529.50	12.25	12.25	12.25	22.5%
Benchmark Comparisons (%)					30/6/2000
	1M	3M	6M	1Yr	3Yr
Fund	8.2	-15.86	-8.95	-	-
Nifty Total/I-Bex	3.56	-0.70	3.06	22.68	11.26
Obj Avg	5.86	-10.20	-4.70	30.19	17.82
Top Holdings (30/6/2000)					Net assets (%)
Infosys					17.65
VisualSoft					9.14
SSI Ltd					8.56
Satyam Computer					4.07
Hughes Software					2.76
Pfizer India					2.25
HLL					1.90
Punjab Tractors					1.56
Hero Honda					1.18
Wipro					1.10
Cipla					0.92
Sun Pharma					0.89
ITC					0.83
Mastek					0.79
Morepen Lab					0.66
Essel Packaging					0.61
Hoechst Marion					0.58
Indian Shaving					0.57
Hindustan Inks					0.54
Subex Systems					0.48

Source: Value Research

Fund File

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