Birla Sun Life MNC has outperformed its rival UTI MNC over one-, three- and five-year time periods. The fund makes investments in the shares of India listed multinational companies (MNC). Birla Sun Life MNC has track record of more than 13 years and has outperformed its benchmark, CNX MNC index, consistently. We take a look at the fund’s sector and stock choices for the past three to four years to see what has driven its outperformance.

Sector Trends

The fund had exited the Telecom sector in October 2009 which was among its top holdings. . It gradually reduced its allocation in the Gas sector and exited from it this January. Interestingly, the pesticides sector is currently among the top ten holdings with an increased allocation of 6.8 per cent.

Pharma sector was the fund’s largest portfolio holding during 2009 and 2010 when the sector did well and outperformed the markets. However, subsequently, the fund started trimming its allocation in this sector from 17 per cent in February 2010 to 11 per cent in February 2013. On the other hand, the fund has boosted holdings in the consumer non-durables sector from 15.9 per cent in 2010 to 20.8 per cent. During May 2012, it had 24.6 per cent holdings in this sector. The fund thus has been able to take appropriate momentum calls.

Finance, industrial capital goods, banks, auto ancillary and automobiles are the fund’s other top holding sectors.

Stock Moves

Colgate-Palmolive (India), GlaxoSmithkline Consumer Healthcare and Pfizer were the top three holdings in the fund’s portfolio in February 2009.

The fund began reducing its exposure to Colgate-Palmolive (India) in August 2009 as the stock made quick gains in a short period of time. Though the stock continued its bull-run until January 2013, the fund limited and maintained its allocation at around 3 per cent.

After reaping the benefit of a strong rally in the GlaxoSmithkline Consumer Healthcare stock, , the fund exited it this February.ING Vysya Bank stock got prominence in the fund’s portfolio in July 2009 and has almost 8 per cent allocation. In the past one year, the stock has gained 56 per cent.

The fund picked the stock of Hindustan Unilever in August 2010 and Bayer CropScience in August 2011. It raised its holdings in these two stocks which are presently among the fund’s top five holdings. Bayer CropScience has gained 49 per cent in recent times.

Gujarat Gas Company, Alstom India and Sanofi India are the few stocks the fund exited in the last one year. However, Akzo Nobel India, Blue Dart Express and Ranbaxy Laboratories were included in the portfolio.

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