Aditya Birla Mutual Fund AMC has recently launched a new mutual fund scheme known as Aditya Birla Sun Life PSU Equity Fund. The New Fund Offer is open for subscription till December 23, 2019.
The mutual fund is an open-ended equity scheme that will majorly focus on equity and equity related instruments of Public Sector Undertakings (PSUs) or firms where the minimum government stake is 51%.
During the launch of the fund, A. Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC Limited said, “Most PSUs are quality companies with strong balance sheets and the potential to get re-rated over a period of time. The government’s increasing focus on strategic divestment plans will also help unlock value for some of the PSUs. This combined with the attractive valuations and their underlying intrinsic value make them a compelling investment choice,”
Features of Aditya Birla SL PSU Equity Fund
- The PSUs are the backbone of the economic growth of the country, and vice versa. Mahesh Patil, the fund manager of the fund believes that the current market sentiment allows investors to hold shares of government companies, that are normally quite expensive. If the country’s economy grows, the valuation of these PSUs also increases, thereby profiting the shareholders.
- During the New Fund Offer, the minimum investment amount for the fund is ₹500 and in multiples of ₹1 thereafter.
- The fund also plans to allocate some of the assets to non-PSU firms during a specific time period, to materialize from the changing reforms and government policies. However, the maximum exposure to this allocation has been capped at 20%.
Why Should you Invest in ABSL PSU Equity Fund?
- As the fund consists of equity securities of well-established companies, the inherent market risk is low owing to stable growth prospect of the PSUs.
- The fund is well-diversified and is a good fit for investors seeking long term capital appreciation.
- The current economic condition has lowered the share prices of numerous government companies, and there is a huge scope for making substantial capital gains in the long run from this investment.
- The Return on Equity of large PSUs has always been high, owing to their monopolistic position in the market. Also, the steady cash flows guarantee timely and high dividend payout. In some of the sectors, the invested companies manifest features of large cap companies.
Who should invest in Aditya Birla Sun Life PSU Equity Fund?
Investors with moderate risk appetite looking to diversify their investment portfolio can consider investing in this scheme. Since the PSUs are currently going through a rough ride, individuals should have a long term investment horizon to actually benefit from the investment.
Investors who wish to own a substantial stocks of high-end central public sector enterprises can opt for this scheme. However, it is advisable that novice investors look for other investment avenues as this is a new fund, with no historical returns data to validate the claims by the AMC.
Other funds by Aditya Birla Sunlife Asset Management
| Scheme Name | 3Y Returns (%) | AUM(Cr.) | Category |
| Aditya Birla Sun Life Banking & Financial Services Fund | 13.08 | 1549.58 | Sectoral/Thematic Fund |
| Aditya Birla Sun Life India GenNext Direct Fund | 15.07 | 804.61 | Sectoral/Thematic Fund |
| Aditya Birla Sun Life Digital India Fund | 20.5 | 134.75 | Sectoral/Thematic Fund |
| Aditya Birla Sun Life Equity Fund | 10.65 | 9250.62 | Multi Cap Fund |
| Aditya Birla Sun Life Tax Relief 96 Fund | 12.62 | 6059.83 | ELSS |
| Aditya Birla Sun Life Equity Advantage Fund | 8.99 | 6184.03 | Large & Mid Cap Fund |
| Aditya Birla Sun Life Government Securities Fund | 9.65 | 138.97 | Gilt Fund |
| Aditya Birla Sun Life Tax Plan | 11.98 | 742.27 | ELSS |
| Aditya Birla Sun Life Banking & PSU Debt Fund | 8.51 | 6646.43 | Banking and PSU Fund |
| Aditya Birla Sun Life Balanced Advantage Fund | 7.85 | 3421.11 | Dynamic Asset Allocation |
| Aditya Birla Sun Life MNC Direct Fund | 12.67 | 3431.79 | Sectoral/Thematic Fund |
| Aditya Birla Sun Life Focused Equity Fund | 10.78 | 4212.48 | Large Cap Fund |
| Aditya Birla Sun Life Short Term Direct Fund | 8.1 | 5010.19 | Short Duration Fund |
| Aditya Birla Sun Life Corporate Bond Fund | 8.19 | 17329.9 | Corporate Bond Fund |
| Aditya Birla Sun Life Low Duration Fund | 8.24 | 9060.5 | Low Duration Fund |
| Aditya Birla Sun Life Financial Planning Fund FoF Aggressive Plan | 9.09 | 126.73 | Multi Asset Allocation |
| Aditya Birla Sun Life Floating Rate Direct Fund | 8.05 | 6173.05 | Floater Fund |
{Data as on Feb 17, 2020; Source: Value Research}