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Birla AMC Select Sector

Scheme Rating

IME Scheme Rating

3 of 5 stars

Not in favour of MF Driven PMS Firms: 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).

IME Strategy Rating

3 of 5 stars

Concentrated Sector Approach: 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).

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

IME View on Birla AMC Select Sector

Type: Flexi Cap | GARP | AUM (275.8 cr) | Inc Date (6 Oct 2009)

Aditya Birla Capital Select Sector Portfolio- Investment Strategy

Aims to invest in India growth story by focusing on sectors with strong operating dynamics and growth visibility

Birla PMS’s Select Sector Portfolio follows a focused approach (80% of the portfolio to be invested in 4-6 sectors) of investing in sectors with strong operating dynamics and growth visibility, that are core to the India growth story.

Investment Philosophy 

Top-Down

Top-down approach focuses on identifying recurring winners that have consistently created value. The philosophy identifies sectors that grow faster than the GDP. 

Companies that are identified through top-down approach operate in favourable industries and have the potential for consistent profitability (reflecting in return ratios such as ROEs and ROCEs)

Bottom-Up

Bottom-up approach is used to identify misprice companies and buy them at a discount to the fundamental value. This approach uses pitroski score and focusses on extensive fundamental research (company strategy, management and execution)

Investment Process 

  1. Track the Investment Universe on a monthly basis (by applying Quantitative Screeners & IP) tracking [Recurring Winner, Piotronski Score, ROE & D/E  Filters]
  2. Reject 80% of the companies which do not filter through the screeners. (using an Extensive Fundamental Research)  by checking  [Management meetings, Dealer/channel checks, Plant/ Factory visits]
  3. Around half of remaining companies pass this filter (Value investing & Portfolio optimisation) looking at [Valuation Screener, Potential upside of 100% in 3-4 years]
  4. Select 25-30 quality companies with high growth and potential upside. 

Trailing Performance

1yr 3yr 5yr Since Inception
Birla AMC Select Sector 44 25.9 23.4 16.7
S&P BSE 500 TRI 39.5 19.5 19 13.2
Alpha over Broad Mkt BM 4.5 6.4 4.4 3.5
Nifty 500 38.4 18.1 17.5
Alpha over Category BM 5.6 7.8 5.9

Performance as of: 28-Feb-23 | Inception Date: 06-Oct-09

Fund Managers

Dhaval Mehta | 2-star rated FM

FM | 17 yrs Experience

Past Experience: ASK AMC, Emkay Global, Ventura Securities, Infosys

Dhaval Mehta Has 9+ years of experience in equity research and portfolio management. Dhaval’s main domain expertise is in Consumer Staples & Discretionary, Retail, Building Material, Cement and Media sector. Prior to joining Aditya Birla AMC, he has worked with ASK Investment Managers as Portfolio Manager and managed assets over $200mn. He has also worked with Emkay Global, Ventura Securities and Infosys.

Salvin Shah | 2-star rated FM

Fund Manager | 12 yrs Experience | 5 yrs at current firm

Past Experience: Athena Capital (FM), Edelweiss (Analyst)

Salvin has 8 years of equity experience, having worked as a FM at Athena Investments and a Research Analyst at Edelweiss. Prior to joining the investments industry, Salvin worked as an associate in CA firms.

Fee Structure

Fee StructureFee
Fixed Fee Structure2.5
Variable Fee Structures1% fixed + 20% above 12% hurdle
Exit Fees1yr(3%), 2yr(2%)

AMC

AMC: Birla AMC PMS (click link for detailed AMC review)

Not a top recommendation due to being an AMC-driven PMS: Birla AMC PMS suffers from the common ailments of large AMC-driven PMS houses (PMS as an add-on instead of a clearly segregated business unit, churn in the investment team, a lack of skin in the game for the CIO and typically loosely defined investment philosophies). While the distribution strengths of the AMC can help the PMS scale and there are benefits of research access, most AMC driven PMS's cannot compare to strong CIO-cum-founder driven PMS houses.

AMC Rating

3 of 5 stars

AMC Pedigree

3 of 5 stars

AMC Size

4 of 5 stars

Team Pedigree

3 of 5 stars

Inv Philosophy

1 of 5 stars

Performance

2 of 5 stars

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