Aditya Birla Sun Life Frontline Equity Fund

Aditya Birla Sun Life Frontline Equity Fund

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A joint venture between Aditya Birla group of India and Sun Life Financial Inc. of Canada has introduced Birla Sun Life Frontline Equity fund. It is as an open ended large cap equity fund under Birla Sun Life Mutual Fund.

 As one of the leading asset management companies, Birla Sun Life Mutual Fund offers a wide range of fund options to invest in.  Currently, Birla Sun Life Frontline Equity Fund has been consistently outperforming its peers and has emerged as one of the most popular large-cap mutual funds.

Before focusing on Aditya Birla Sun Life Frontline Equity Fund, let’s throw some light on large-cap equity funds.

About Large Cap Equity Funds

Large companies are those companies which are listed among the 100 largest companies on the stock exchange whereas mid-cap companies are known as those companies that have a market cap smaller than large-cap companies. Birla Sun Life Frontline Equity fund majorly invests in large-cap companies with smaller portions invested in equity related instruments in mid-capitalization and small-capitalization companies.

The large-cap equity funds decrease the overall risk of the scheme. Moreover, in case of bull trend moves to a bear market, the large-cap equity fund prevents the investment value from changing drastically. As compared to other investment options, one can potentially reap higher growth benefits if he/she carefully manages the large cap, mid cap, and small cap fund allocation.

Birla Sun Life Frontline Equity Fund: Objective

BSLF equity fund’s objective is to provide long-term capital appreciation to its investors through investment in equity funds and instruments related to it. Under this scheme, the investment is done in industries like oil and gas, IT, FMCG, finance, etc. In order to provide the utmost level of growth in the long term, the fund chooses equity stocks based on their potential. Birla Sun Life mutual fund also aims to distribute its investments in multiple sectors so that the allocation is in line. According to the key objective of the fund, its equity allocation is between 75-100% whereas 25% is the balanced portfolio of the fund which will be invested in money market and debt instrument.

 The topmost equity holdings of Birla Sun Life Frontline equity funds are banking and financial services, automotive, engineering and capital goods, chemicals and pharmaceuticals, metal and mining, consumer and non-durables, food and beverages, IT technology, oil and gas, manufacturing and others.

Birla Sun Life Frontline Equity Funds Key features:

Inception- In August 2002, the individual investors first made the fund available for subscription.

Entry Load- This mutual fund does not include any entry load for the subscription of the scheme as directed by SEBI.

Exit Load- The investor can decide to convert the investment in the scheme before the completion of 365 days from the date when the fund unit was allotted. In this case, an exit load will be applicable on the equity fund. Currently, 1% is the exit load of the scheme against the amount redeemed by the investor.

Minimum Investment Amount- Rs1000 is the minimum investment amount applicable for the new investors who want to invest in BSLF equity fund. For the preexisting investors who have already invested in the scheme, Rs1000 is the minimum amount for an additional investment. For an SIP, the minimum number of installment in Birla Sun Life Frontline Equity Fund is 6, whereas the minimum SIP amount to be invested in Rs1000.

There are 4 Fund Options Available Under Scheme

  1. Direct Plan- In direct plans, the routes available for investments are limited as the investment is made directly with fund houses. Therefore, direct plans are comparatively less popular as compared to the regular plans of the fund. The major advantage of this plan is the lower expense ratio, which results in higher Net Asset Value (NAV) for the fund’s unit along with the higher return for long-term investment in equity mutual fund.
  2. Regular Plan- This is the most commonly availed investment plan because one can avail this via fund houses as well as through 3rd party security market intermediaries. As compared to direct plan, the units of regular pay feature low NAV and slightly higher expense ratio. However, due to the convenience of investing in this plan makes it a preferred option for subscription for most of the investors.
  3. Growth option – This option is most suitable for investors who want capital growth and appreciating investments for a medium to long-term period. Under growth option, the investors do not receive any dividend payouts while investing in the fund option. If the fund gains profits on the investment, then these profits are invested back in the fund thus increasing the NAV and AUM of the fund. The increase in net asset value reflects as capital gains resulting in the growth of value.
  4. Dividend Option- if you want to gain regular or periodic income from your investment then you can choose to invest in the dividend option of regular or direct plan of Birla sun life frontline equity fund. As per the declaration of dividend, the NAV of the respective unit decreases proportionately, thus the dividend option results in a lower NAV. While choosing the dividend option the investors should keep in mind that the payout is not guaranteed under this option as the payouts are only possible if the fund makes profit. This option is most beneficial for those investors whose primary objective is income generation rather than capital appreciation.

Tax Benefit Offered by Birla Sun Life Frontline Equity Fund

 The money invested in equity, and instruments related to it are tax exempted under section 80C of Income-tax Act. Moreover, up to 15% of profit gained is also tax deductible under the Income Tax Act.

Wrapping It Up!

With a strong customer support service and professional market experts, Birla Sun Life Mutual Fund offers a wide range of fund options for investors to choose from. Moreover, it also helps to make a strong portfolio so that one can gain maximum capital appreciation through investment.