Its time to go long: Update on Birla Sun life Income Plus

Birla Sun life Income Plus is an open ended income Scheme which invest in a combination of bonds and government securities of varying maturities. It is an actively managed income scheme that endeavors to generate income, through superior yields on its investments, at relatively moderate levels of risk through diversified research based investment approach.

 

The scheme has flexibility of changing the modified duration within a wide range depending upon fund managers’ view on market conditions. Historically, the scheme has had a modified duration of as low as 3 months to as high as 10 years. Currently it endeavors to maintain the modified duration of around 6-7 years.

Returns  Report as of 01-Jan-13

Scheme 1 Day 7 Days 14 Days 30 Days 60 days 90 Days 180 Days 1 Year 2 year Inception Avg.Mat
Birla Sun Life Income Plus

198.47

52.07

33.77

22.63

15.08

11.72

11.92

11.2

9.78

10.04

12.2

 

Bond Market Outlook

 

Post October 2012 policy we had witnessed about 10bps backing-up in yield on 10 year benchmark g-sec and widening of term spreads on the gilt curve. However, announcement of OMO at November 2012 end has helped the G-sec yields to cool down and have reduced term spreads.

We expect RBI to undertake about INR 50-60k crore of incremental OMOs till March 2013. Combination of OMOs, expectation of policy rate cut and demand-supply of SLR securities being skewed in favour of SLR till March 2012 end are expected to be duration positive.

We continue to prefer GOIs over Non-SLR, given already lower spreads on corporate bonds. Overall we stick to our view that we could witness about 75-100 bps rate cut over the next one year and that the rate cut cycle will unfold gradually this time giving decent opportunity to the investors, especially the first movers, to benefit from it.

 

Portfolio Action and Strategy

 

Currently the scheme is biased towards SLR securities with chief emphasis on G sec. The scheme has increased the exposure in SLR securities of tenure 10 -12 yr and a few of even longer term, making it around 82.7% of the net assets as on 30 November 2012, (with around 75% of the net assets in G sec) by reducing exposure to corporate / PSU bonds which is around 12.38% of the net assets, as on 30 November 2012.

 

The modified duration as on 30 November 2012 is 7.32 years.

The YTM of the scheme as on 30 November 2012 is 8.47%.

 

Birla Sun life Income Plus  may be considered by investors with investment horizon of 1 year and above

 

PFA Product Note of BSL Income plus

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admin January 4, 2013

Its time to go long: Update on Birla Sun life Income Plus
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adminMutual FundsBirla Sun life Income,government securities,income Scheme,modified duration,SLRIts time to go long: Update on Birla Sun life Income Plus Birla Sun life Income Plus is an open ended income Scheme which invest in a combination of bonds and government securities of varying maturities. It is an actively managed income scheme that endeavors to generate income, through superior...Useful and Important Documents