Looking for a flexi-cap fund, with a large-cap tilt to ride a volatile market? Then, you can consider Birla Sun Life Equity Fund that invests in stocks across market capitalisation, with about 80 per cent exposure to large-cap stocks. While the fund is not a chartbuster, it has delivered decent returns during rallies and capped losses well during turbulent times. Investors with a moderate risk appetite can bet on this fund for its ability to navigate through various market phases.

The fund has managed to beat its benchmark BSE 200 by 4-10 percentage points over one, three and five-year periods. Its returns are on a par with other top performing funds, such as Kotak Select Focus and SBI Magnum Multiplier over similar time frames.

The fund, however, scores a tad lower on consistency. On a one-year rolling return basis, the fund has managed to beat its benchmark 63 per cent of the time in the last five years. This is largely due to its not-so-robust performance until 2011.

But the fund has ramped up its performance in the last two years. Its rolling return over a three year period is a healthy 83 per cent.

Deft moves The fund has done well both in the tepid markets of 2013 and 2015 and the rising markets of 2012 and 2014, outperforming category and benchmark.

While large cap stocks have dominated its portfolio across market cycles, adept rotation of stocks across sectors and timely increase or pruning of mid-cap stocks, have kept the fund’s performance in good stead. For instance, in 2014, when mid and small cap stocks were on a tear, the fund had upped its exposure to such stocks to around 22 per cent, which now — given the iffy market — has been trimmed to around 16 per cent. After a strong show in 2014, as markets turned choppy in 2015, the fund held its ground, gaining 3 per cent, even as BSE 200 fell 2 per cent. Trimming stakes in cyclicals such as banks and capital goods helped. The fund has reduced its exposure in Axis Bank, Indian Bank and Bharat Forge as well as in software major Tech Mahindra, which fell out of favour with investors in 2015. Exiting positions in ICICI Bank, Vedanta and Jindal Steel and Power also helped cap losses.

On the other hand, timely addition of stocks such as Bajaj Finance, SKS Micro Finance and Dishman Pharma boosted performance. The fund does not take significant cash calls and rides market rallies on the way up; over the last five years, irrespective of market conditions equity holdings was maintained at an average of 95 per cent.

Current portfolio At this juncture, the fund manager is betting on a mix of economic recovery and defensive themes with banks, pharma and finance being the top three sector choices.

Three private sector banks dominate its top five holdings with a 14 per cent exposure.

The fund holds around 65 stocks across 24 sectors, which mitigates the risk.

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