Why Is Aditya Birla Sun Life Focused Equity Fund (G) the Best for Savings?

Mutual Fund investments have shown a great rise in the past couple of years and the main reason behind that is the increasing awareness of these gold mines among investors. People who used to feel that these schemes are just a blind bet have now started to realize that these are more than that. In fact, if we would give an exact name, then we can say that mutual funds are saving options with superpowers. Today, we are going to discuss one such super fund from this league which has helped thousands of investors in achieving their financial goals, and the name of the scheme is Aditya Birla Sun Life Focused Equity Fund. So, let's see what this fund is and why it is the best saving option that you can opt for.

A Quick Insight into Aditya Birla Sun Life Focused Equity Fund (G)

This equity large-cap scheme was introduced to the mutual fund industry on Oct 24, 2005, with the aim to provide long-term capital appreciation by investing in a maximum of 30 optimal quality stocks. These stocks are picked with supreme accuracy and after observing various factors like growth potential, fundamentals, the risk to return ratio, etc. After re-categorization, due to this stock picking style, the name of the scheme was changed to Aditya Birla Sun Life Focused Equity Fund (Previously known as Aditya Birla Sun Life Top 100 Fund). It currently has 95.43% investment in large-caps and 4.47% in mid-cap companies. The small investment in mid-caps is only in companies that have a high potential of becoming large-caps in the near future. Now, let's have a look at the sector allocation of the fund.

From the above pie-chart, you can see that it has maximum allocations in the finance, technology, FMCG, and construction sector. All four of these are evergreen sectors and no matter how bad the equity markets get, these are bound to recover. The top 5 holdings from these sectors include big equity players like HDFC Bank, Infosys, ICICI Bank, ITC, and Larsen & Toubro. One common factor that you will notice about the above stocks is that during the recent market volatility these were among the few which were least affected by it. Now, let's see the basic parameters of the scheme.

As on Aug 03, 2018, Aditya Birla Sun Life Top 100 Fund NAV is Rs 58.95 and the assets under management as recorded on Jun 30, 2018, are worth Rs 4,063 crores. The expense ratio of the fund is 2.36% (as on Jun 30, 2018) and 1 % exit load will be charged if your redeem your investments before 365 days. To start an investment, you will have to make an initial investment of Rs 1000, after which you can either choose SIP or can make additional investments manually. Now, we will move towards our main question, why it is a great option for savings. Let's find out!

Why Is ABSL Focused Equity the Best Savings Option?

There are three main reasons which make this scheme great for saving which we will see below:

1. The first reason is the consistency in returns which it has shown. Aditya Birla Sun Life Focused Equity Fund Growth Plan has provided returns of 19.82%, 14.76%, and 14.21% in 5, 7, and 10 years, respectively (as on Aug 03, 2018), and has beaten both its benchmark and category on all occasions. This show that how good this scheme in providing stable returns, which should be a major property of a good saving instrument.

1. 2. The second reason is the low minimum investment amount (Rs 1000), which helps the investors with low income to make investments without affecting their monthly budget.
2. 3. The third reason is the optimal management skills of Mr. Mahesh Patil (Fund Manager). He follows a "buy and hold strategy", which means buying a stock at a lower price band and then waiting for it to reach maximum levels before selling. This helps the scheme to make high and consistent profits, even when the total number of securities are not that much.

With this, we end our discussion on Aditya Birla Sun Life Focused Equity Fund. This scheme is currently used by thousands of investors for purposes such as retirement planning, long-term saving, child's education, etc., and the sole reason behind that is the low risk to return ratio. So, if you are a person who is looking for a scheme in which low-risk investments can be made, then this is the fund which you need.

Read this article to see a basic analysis of Aditya Birla Sun Life Focused Equity Fund and why it is considered as an optimal saving option.

Dishika is well-versed with the ups and downs of the financial market and has published articles on mutual fund and SIP. She is associated with MySIPonline.com, which is an AMFI registered mutual fund company.