Aditya Birla Sun Life MF launches ABSL Business Cycle fund

NEW DELHI: Aditya Birla Sun Life AMC Ltd has launched Aditya Birla Sun Life Business Cycle Fund, an open-ended equity scheme that will follow a business-cycle-based investing theme. The new fund offer (NFO) will be open  from 15-29 November.

ABSL MF said the fund will follow a top down approach of portfolio construction to identify stage of business cycle basis multiple parameters, then deep dive into sector cycles and opportunities and bifurcating the portfolio into defensive and non-defensive sectors, followed by using bottom up approach to identify strong companies within those sectors using the fund house’s Growth at Reasonable Price (GARP) philosophy.

"It (business cycle) is divided into four phases – expansion, peak, contraction and slump, and all four stages have a cascading impact on the markets. The length and dynamics of each phase vary based on a range of factors such as regulatory, policies, reforms, geopolitics, domestic or global events, among other things...Any investor would require navigating through these phases of a business cycle, at the same time will need to have presence across the right sectors, at the right time. And that is precisely what Aditya Birla Sun Life Business Cycle Fund will offer investors,” said a statement from the fund house.

Since investors may not be able to identify the stages of economic and sectoral cycles and transition accordingly, a scheme like Aditya Birla Sun Life Business Cycle Fund can be an investment vehicle to take advantage of investment opportunities that are aligned with changing phases of a business cycle.

Commenting on the launch, A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC, said, “The economy, periodically, undergoes expansionary and contractionary phases. Research suggests that sectors do not provide systematic performance through business cycle phases. Defensive sectors, like FMCG, healthcare and IT provide better returns through the contraction phase while non-defensive sectors like metals, financials and cement provide better returns during the expansion phase. With no sectoral and market-cap bias, Aditya Birla Sun Life Business Cycle Fund will actively identify investment opportunities and manage allocation through various business cycles to generate returns.”