Birla AMC Select Sector
Our view on the fund, the AMC, the strategy, the performance & the investment team.
IME's Review of Birla AMC Select Sector
| Fund Rating | Strategy Rating | Performance Rating |
|---|---|---|
Upgrade | Upgrade | Upgrade |
View on the Fund
Typically we are not in favour of PMSs offered by Mutual Fund AMC's. While they can scale, built on their experience in managing mutual fund assets & substantial distribution strengths, the stability of the core investment team & investment processes can suffer due to FM churn (which is where we prefer promoter-manager-driven PMS's).
Strategy
Concentrated Sector Approach
Fund's Strategy View
Concentrated Approach (25-30 stocks) with 80% of the the portfolio invested in 4-6 sectors (that can grow faster than GDP). While we like the concept of a focused sector approach, we would have preferred a more concentrated approach than the defined 80% of the portfolio to be invested in 4-6 sectors (which is not truly concentrated, especially in some of the larger sector definitions).
Fund Performance
The fund has outperformed peers & is amongst the top performing schemes in this category in the last 5 year trailing returns. In terms of longer-term annual performance, performance consistency has been mixed, with the fund having outperformed & underperformed the bechmark roughly in half the years.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Birla AMC Select Sector | 9.3 | 26 | 25.4 | 16.9 |
| S&P BSE 500 | 6.5 | 15 | 15 | 12.6 |
| Alpha over Broad Mkt BM | 2.8 | 11 | 10.4 | 4.3 |
Performance as of: 31-Jan-26 | Inception Date: 06-Oct-09 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Salvin Shah | 2-star rated FM
FM | 16 yrs Experience | 4 yrs at current firm
Past Experience: Sanctum, Edelweiss Securities & Athena Investment Management
Salvin Shah has 10+ years in Portfolio Management and Equity Research, He has extensive experience in managing Indian Equities. He has been successful at identifying themes and stocks at a very early stage which has resulted in multi-bagger returns for the investors. Prior to joining Aditya Birla AMC, he worked with Sanctum Wealth Management as Co-fund Manager in their PMS business. Before Sanctum, Salvin was a part of equity research team at Edelweiss Securities and Athena Investment Management.
Sameer Narayan | 2-star rated FM
Head | 24 yrs Experience | 6 yrs at current firm
Past Experience: SVP-Adani Advisory
Sameer has more than 20 years of experience in Indian equity markets. In his role as Principal Officer, Sameer will be responsible for the PMS division within the firm. His last assignment was with Adani Advisory LLP as Sr. Vice President where he established the Family Office and was responsible for advising investments in Indian equities. In the past, he has also worked with BNP Paribas Investments managing onshore and offshore funds under Portfolio Management Services. Sameer has also worked with SSKI, Enam Securities and Motilal Oswal in the Research Function. He holds Masters in Management Studies (MMS) from Narsee Monjee Institute of Management Studies (NMIMS), Mumbai and B.E degree with specialization in Production Engineering.
IME's Review of Birla AMC PMS
| AMC Rating | Pedigree Rating | Team Rating | Philosophy Rating |
|---|---|---|---|
Upgrade | Upgrade | Upgrade | Upgrade |
View on AMC
Birla AMC PMS faces challenges common to large MF-driven PMS firms, such as PMS being treated as an add-on rather than a separate business, high turnover in the investment team, lack of commitment from the CIO, and vague investment strategies. Despite the distribution advantages of the AMC and research resources, MF-driven PMSs usually do not match the success of CIO-led PMS firms.
AMC's Pedigree
Birla AMC is a top-5 Asset Manager in India known for managing mutual fund assets. While being part of a larger asset management house offers synergy benefits, their pedigree in AMC-driven PMS falls short compared to investor-cum-promoter driven PMS's with stable investment teams and defined processes.
AMC Team
Birla PMS has a moderately experienced investment team with synergies from the senior Mutual Fund team. The team has been stable but changes may occur as it is not promoter-driven.
Investment Philosophy
The investment philosophy is vaguely defined, allowing fund managers flexibility to invest in various sectors and styles.
Investment Strategy
The Select Sector Portfolio aims to participate in India’s long-term growth by focusing on sectors with strong operating dynamics and high earnings visibility. The strategy follows a focused allocation approach, with ~80% of the portfolio invested across 4–6 high-conviction sectors that are core to the India growth story.
Investment Philosophy
The strategy combines a top-down sector selection framework with bottom-up stock picking to identify recurring winners and mispriced opportunities.
- Top-Down (Sector Selection): Identifies sectors growing faster than GDP and operating in favourable industry environments. Companies selected through this lens typically demonstrate consistent profitability and strong return ratios such as ROE and ROCE.
- Bottom-Up (Stock Selection): Identifies mispriced companies trading below intrinsic value using Piotroski scores and detailed fundamental research covering business strategy, management quality, and execution capability.
The integration of both approaches enables construction of a concentrated portfolio of 25–30 stocks drawn from structurally attractive sectors.
Investment Process
- Universe Screening: Monthly tracking of the investment universe using quantitative filters such as recurring winner screens, Piotroski score, ROE, and leverage (D/E).
- Fundamental Validation: Elimination of nearly 80% of companies through detailed fundamental research, including management interactions, dealer and channel checks, and plant or factory visits.
- Valuation & Portfolio Optimisation: Further narrowing of the universe based on valuation discipline and risk–reward assessment, targeting opportunities with potential upside of up to 100% over 3–4 years.
- Final Portfolio Construction: Selection of 25–30 high-quality companies with strong growth visibility and favourable upside characteristics.
PMS Background
As part of one of India’s top-five mutual fund houses, Birla AMC PMS benefits from the substantial research depth, broker and corporate access, and distribution strengths of the broader mutual fund platform. However, the PMS business operates as an extension of the AMC rather than as a founder-led investment platform. As a result, the PMS has historically seen higher investment team churn, limited skin-in-the-game at the CIO level, and relatively loosely defined investment philosophies compared to investor–promoter–driven PMS houses.
PMS Investment Philosophy
Birla AMC PMS follows a value-oriented investment framework aimed at generating long-term alpha by combining quantitative screening with fundamental research. The philosophy emphasizes sustainable growth, favourable industry structures, and disciplined valuation.
Investment Tenets
- Focus on sustainable long-term growth in select industries with favourable operating conditions.
- Preference for businesses and sectors that consistently create value through structural advantages.
- Use of quantitative screeners supported by bottom-up fundamental research.
- Value-investing approach to identify mispriced opportunities and generate alpha.
Investment Approach
The strategy employs a blended top-down and bottom-up approach to construct a portfolio of 25–30 companies.
- Top-Down: Identifies “recurring winners” by focusing on sectors growing faster than GDP and operating in favourable industry environments. Companies selected through this lens typically demonstrate consistent profitability and strong return ratios (ROE, ROCE).
- Bottom-Up: Identifies mispriced companies trading at a discount to intrinsic value using Piotroski scores and detailed fundamental analysis of business strategy, management quality, and execution capability.
Investment Process
- Universe Screening: Monthly tracking of the investment universe using quantitative filters such as recurring winner screens, Piotroski score, ROE, and leverage (D/E).
- Fundamental Validation: Elimination of approximately 80% of companies through detailed fundamental research, including management meetings, dealer and channel checks, and plant or factory visits.
- Valuation & Upside Assessment: Further filtering based on valuation discipline and potential upside, targeting opportunities capable of delivering up to 100% returns over 3–4 years.
- Portfolio Construction: Final selection of 25–30 high-quality companies with strong growth prospects and attractive risk–reward profiles.
Suitable For
Investors seeking the comfort of investing with a large, established AMC brand, while aiming for higher risk–return potential than traditional mutual fund strategies.
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