Mutual Fund Focus - Birla SunLife Income Plus

Investment Objective

• This scheme invests in debt instruments such as bonds, government securities, corporate debt etc.
• This scheme is suitable for investors looking for consistent income
• The mandate is to invest 100% of assets in debt instruments and money market instruments. The current asset allocation is 91.6% debt and 8.4% cash/cash equivalents

Who Should Invest?

• An individual/corporate whose investment objective is consistent income and moderate risk appetite
• An individual/corporate looking at investing for the time horizon of about 2 years and more
• An individual/corporate looking at adding a medium term income fund in an otherwise diversified portfolio

About the Fund Manager - Mr. Maneesh Dangi

• Education: MBA and FRM degree.
• Experience: Total 7 years of experience. Prior to joining Birla SunLife in Jan 2006, he has worked with Pioneer InvestCorp as Head of Fixed Income Investment Consultancy
• Other Schemes Managed: Birla SunLife Dynamic Bond Fund, Birla SunLife Short Term Fund, Birla SunLife Govt. Sec. Fund etc.

Scheme Details

Performance Review (As on 10th March 2009)

• Birla SunLIfe Income Plus has always managed to outperform its benchmark (Crisil Composite Bond Fund Index) except in 3 month duration
• The scheme has delivered 2nd highest returns (11.69%) in last 1 yr after Fortis Flexi Debt Fund when the category average stands at 7.5% during the same period

Growth in Asset Under Management (As on 10th March 2009)

• The declining AUM seen in year 2008 was a result of panic selling by investors due to huge volatility in the debt market
• Dec 2008 was the turning point for this fund as the AUM increased by 2.75 times in 1 month duration contributed by increased inflows in the fund.

iTrust Observations

• Birla SunLife Income Plus has a good quality portfolio with all AAA and Sovereign rated securities. Currently, 64.17% of total assets are Sovereign rated and 27.40% is AAA rated portfolio. This ensures high credit quality and lower risk in the portfolio
• The fund manager has increased the debt exposure from 39% to 92% in last 6 months and the major exposure is taken in government securities (increase from 2% in Oct 08 to 64% in Feb 09). The average maturity of the fund is 10.47 years and Yield to Maturity is 7.75%. This indicates that an investor will get 7.75% yield if he remains invested in the fund for 10 years
• The fall in bond yields has resulted in rising bond prices. This has increased the NAV of the scheme contributing to the high returns delivered by the fund in last 1 year. The fund has also been declaring consistent dividends (average 7% annually) in its quarterly dividend option since last 2 years

Risk Factors

• Credit Risk: Some debt securities are subject to credit risk. Any default by these securities may lead to loss to the investor
• Interest Rate Risk: The interest rate volatility in Indian markets may impact the NAV of the scheme by impacting the price of debt instruments

Disclaimer

Neither the information, nor any opinion contained in this note constitutes a solicitation or offer by iTrust to buy or sell any mutual fund units. The information contained in this sheet is generic. Please consult your financial advisor for suitability of the product.
- MUTUAL FUNDS ARE SUBJECT TO MARKET RISK. PLEASE READ THE OFFER DOCUMENT CAREFULLY BEFORE INVESTING.