- The month was primarily driven by discussions on increase in Oil price due to US pulling out of the Iran deal and as a result Indian rupee coming under pressure.
- The weakness of the currency and additional surveillance on some stocks led to the tale of two market capitalizations in terms of performance. The large cap index, Nifty50, remained flat, while both the midcap and smallcap indices declined over 6% each.
- India’s Q4FY18 GDP came in above expectations at 7.7% driven by a pickup in investment activity and government consumption expenditure. Private consumption and exports have been weak but should rebound shortly.
- We are looking at some companies that have good earnings visibility and are available at reasonable valuation after the correction. Though FY18 has ended with single digit earnings growth, there are indications of a much better FY19 earnings growth.
Source: Bloomberg, ABSLAMC Research
- Aditya Birla Sun Life Balanced Advantage Fund (An Open ended Dynamic Asset Allocation Scheme)
The fund is overweight on select themes like Private sector retail banks & NBFCs, Auto/Auto-ancillaries, Consumer discretionary, Construction/Industrial goods. The fund envisages to use the hedging strategy by taking a balance approach via stock arbitrage & index hedging and this has helped in managing liquidity as well as cost of hedging overall.
- Aditya Birla Sun Life Equity Fund (An open ended equity scheme investing across large cap, mid cap, small cap stocks)
During the month, exposure to a public sector housing finance company was increased basis attractive valuations, while we added a new entrant in the NBFC space. In the Media/Entertainment, we added a film entertainment company due its rapid expansion of screens at strategic locations, given the wider footprints provides high footfalls but also boosts in-cinema advertising, which has become an alternative and attractive source of revenues for the multiplex.
- Aditya Birla Sun Life Small Cap Fund (formerly known as Aditya Birla Sun Life Small & Midcap Fund) (An open ended equity scheme predominantly investing in small cap stocks):
Increased exposure to India's leading and most valuable financial services company as it continues to be a good bet basis attractive valuations & earnings visibility. During the month, we further added an Indian mass media company to the portfolio owing to the expected growth in ad spends along with benefits emerging from digitalisation of cable networks. We also took fresh exposure to one of largest textile and one of the largest gaming company in the country.
The Scheme(s) may or may not have any present or future positions in these sectors
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.