Aditya Birla Sun Life India GenNext Fund is celebrating its anniversary today. Launched on 5th August 2005, the fund has given a decent return of over 17% since inception. Here’s all you need to know about this scheme.

Aditya Birla Sun Life India GenNext Fund is a sectoral/thematic scheme that aims to generate wealth by investing in equity/equity-related instruments of companies that are expected to benefit from the rising consumption patterns in India.

The increasing availability of disposable income in the hands of the young generation (GenNext) has fueled massive consumption trends in the last two decades. The consumption patterns are getting fueled by high disposable incomes, increasing awareness and aspiration amongst a large population of youth. Data from Trading Economics show that consumer spending has increased from nearly Rs 5000 billion in 2007 to approx Rs 24,000 billion by 2023. Since its launch, this fund has been aiming to benefit from these rising consumption patterns in India.

How it invests?

The fund invests in companies that are engaged in manufacturing products or rendering services that suit the requirements and aspirations of the younger generation. It focuses on products and services that have a distinct brand identity, thereby enabling choice.

“The fund endeavours to identify secular growth stories/consistent compounders by following a growth-oriented investment philosophy. It invests in superior-quality stocks with sustained growth visibility. The fund has the flexibility to invest across market capitalization and tends to avoid high beta sectors,” Aditya Birla Sun Life AMC told FE Money while responding to a query on the fund’s investment philosophy.

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Portfolio Allocation

As per the fund’s recent factsheet, a large part of its portfolio (16.26%) is invested in stocks of banks, followed by diversified FMCG (10.42%), Automobiles (8.62%), Consumer Durables (7.73%), Retailing (7.01%), Finance (6.2%), Personal Products (5.89%), Beverages (4.74%), Food Products (4.35%), Telecom (3.41%) Pharmaceuticals and Biotechnology (3.38%), Leisure Services (2.94%).

The top 10 stocks in which this fund has invested a larger percentage of its portfolio are ITC (6.88%), ICICI Bank (5.43%), HDFC Bank (3.62%), Hindustan Unilever (3.54%), Airtel (3.41%), Axis Bank (2.97%), Maruti Suzuki (2.37%), United Spirits (2.37%), Nestle India (2.08%) and Tata Motors (1.99%).

Fund Rating

The Aditya Birla Sun Life India GenNext Fund is rated 3 Star by Value Research

Aditya Birla Sun Life India GenNext Fund Returns

Aditya Birla Sun Life India GenNext Fund tracks NIFTY India Consumption Total Return Index. As per data on the website of the Association of Mutual Funds in India (AMFI) tracked till August 4, the fund has given the following returns:

  • 10-Year Returns: The direct plan of this scheme has given 19.28% annualised returns in 10 years and the regular plan has given 18% returns.
  • 5-Year Returns: The direct plan of this scheme has given 15.31% annualised returns in 5 years and the regular plan has given 13.99% returns.
  • 3-Year Returns: The direct plan of this scheme has given annualised 25.79% returns in 3 years and the regular plan has given 24.33% returns.
  • 1-Year Return: The direct plan of this scheme has given 15.35% annualised returns in 1 year and the regular plan has given 14% returns.

Return Since Inception: Since launch, the regular plan of this scheme has given 17.52% returns.

Expense Ratio, Load Structure

The Total Expense Ration of this fund’s regular plan is 1.92% and the direct plan is 0.86% (including additional expenses and goods and services tax on management fees.) There is no entry load. But there is an Exit Load, applicable at the rate of 1% of applicable NAV for redemption/switch-out of units on or before 30 days from the date of allotment.

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Current NAV and AUM

The current Asset Under Management (AUM) of the fund is Rs 3965.23 crore and the current NAV is 159.5600 (Direct) and 178.6900 (Regular).

Who should invest in this fund?

As Aditya Birla Sun Life India GenNext Fund follows a consumption theme, it tends to avoid sectors with high volatility, making it a good investment option for the first-time investor.

“Aditya Birla Sun Life India GenNext Fund needs to be part of the core portfolio of any investor. The fund is focused on opportunities arising from various socio-economic trends driving value enhancement in consumption across sectors. Also, the fund’s strategy of being sector and market cap agnostic further improves the capability to pick best businesses from across the spectrum and enhances the growth potential,” the AMC said.

While this fund has given decent returns since launch, investors need to be cautious before investing for two reasons:

  • First, there is no assurance or guarantee that this fund will continue to deliver similar performance in future.
  • Second, the sectoral/thematic category of equity mutual funds is crowded with several schemes. Some of them have delivered better returns in the last 10, 5, 3 and 1-year durations.

What should you do if planning to invest?

Investing on the basis of past performance alone is a risky endeavour. Investors should factor in their financial goals, risk appetite and risk capacity to decide whether they should invest in this fund or not. It is recommended to consult a SEBI-registered financial advisor to make the best decision.