Launched in 2002, Aditya Birla Sun Life Frontline Equity Fund has offered 18.03% in 20 years, 15.53% in 10 years, 11.13% in five years, and 20.75% in three years. During the same periods, the benchmark (Nifty 100 – TRI) offered 16.24%, 15.09%, 11.54%, and 19.86% respectively. This shows that the scheme has outperformed its benchmark in all the horizons, except the five-year horizon.
An lumpsum investment of Rs 1 lakh at the time of launch of the scheme would have now grown to Rs 38.72 lakh, with a CAGR of 19.02%. A monthly SIP of Rs 1,000 since the inception of the fund would have grown to Rs 17.17 lakh, with a XIRR of 16.02%. A monthly SIP for a period of 10 years would have offered 13.27% returns. In the seven-year horizon, the scheme offered an XIRR return of 13.90%. In the five-year horizon, the scheme offered XIRR returns of around 16.61%. In the three-year horizon, the scheme has offered 16.35% SIP returns.
Among 11 large cap schemes that have completed 20 years, Aditya Birla Sun Life Frontline Equity Fund ranked second among its peers and offered 18.03% returns.
Aditya Birla Sun Life Frontline Equity Fund ranked sixth among 23 large cap schemes that have completed 10 years, and offered 15.54% returns. The scheme ranked 12 amongst 24 large cap schemes that have completed five years and offered 11.14% returns. Among 25 large cap schemes that have completed three years, Aditya Birla Sun Life Frontline Equity Fund ranked sixth and offered 20.75% return.
The flagship scheme is managed by Mahesh Patil, and Dhaval Joshi (overseas investments). The portfolio of the fund is diversified across 77 stocks, with top 10 stocks accounting for 48.89%. As on July 31, the fund has 96..63% allocation to equity, 0.0047% in debt, and 3.36% in others which include cash and cash equivalents. The scheme is primarily large cap oriented with HDFC Bank, ICICI Bank, Infosys, and Reliance Industries as the top four holdings.
The fund follows a combination of top-down and bottom-up approach to investing.
As per the scheme information document with data as on March 31, 2023, the scheme has 9,38,831 folios, the highest among all open-ended equity schemes offered by the fund house.
Since Sebi introduced the total return index (TRI) in 2018, The scheme underperformed its benchmark in 2018, 2019, 2020, and 2022. It only managed to beat the benchmark in 2021.
Large cap schemes have been underperforming vis-a-vis their respective benchmarks since Sebi introduced Total Return Index (TRI) in February 2018. Earlier, schemes used to be benchmarked against normal indices. For example, Sensex or Nifty. Now, they must be benchmarked against TRI. TRI benchmarks include dividends, which makes them difficult to beat.
“I am happy to say not only has the fund completed 21 years of consistent performance but also created one of the best investor experiences in the large cap space. ABSL Frontline Equity Fund has delivered sufficiently better returns to investors over the last 1-, 3-, 5- and 10-year period. An investor should not be swayed by the period of underperformance as every fund manager goes through a period of cyclicality. Instead, it is more important to see how well the fund manager can realise the change in trend and take the necessary action to bring back the performance on track,” said A. Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC. (If you haven’t read it, you can read it here: Market could go through a period of consolidation,” said Balasubramanian, CEO, ABSL AMC, in a recent interview.
