Birla Sun Life Pure Value has been one of the blockbuster funds in this rally, its NAV more than doubling in the last one year, even as its benchmark, BSE 200, gained a modest 39 per cent. The fund was an early mover into cyclicals in 2013, when defensive themes — pharma, healthcare and IT were in vogue.

As stocks in the power, infrastructure, oil and gas, engineering and capital goods space made a comeback from January 2014, the fund’s returns zoomed. The move was aided by expectation of a speedier economic recovery following the strong election mandate.

But having spotted value in cyclical stocks early on, the fund was also quick to make a cautious shift into defensives this year. Its strategy to balance allocation between defensives and cyclicals during the early part of 2014 again paid off.

This not only helped the fund better the BSE 200 Index but also race ahead of peers such as ICICI Prudential Value Discovery and L&T India Value Fund on a one-year basis.

Birla Sun Life Pure Value turned a buyer in pharma and FMCG stocks in early 2014 even as it continued to add non-banking financials and oil and gas stocks to its portfolio.

Good stock picks in the mid and small cap space boosted fund’s returns. For instance, the fund was prudent in increasing holding in the stock of small cap cement maker Orient Cement in December 2013. The stock price has risen by over 2.5 times since the start of the year.

Offbeat picks

Apart from sector choices, some offbeat picks helped. The fund’s decision to invest 2.6 per cent of its assets in the stock of industrial gas and chemical maker Gujarat Fluorochemicals provided a leg-up to its NAV. Other stocks that lifted the fund’s returns include Finolex Cables (153 per cent gain), Sadbhav Engineering (129 per cent), Banco Products (125 per cent), Apar Industries (125 per cent), Atul Auto (116 per cent) and Edelweiss Financial Services (115 per cent).

In the last five months, the fund has again been shedding its defensive skin by loading up on cyclical stocks.

Currently, around 27 per cent of the scheme’s assets are parked in financial stocks, followed by construction (9.3 per cent) and chemicals (8.6 per cent). Pharma, FMCG and IT stocks account for less than 13 per cent of the total assets. From the 34 stocks in December 2013, the fund currently holds 56 stocks in its portfolio.

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