Can ABSL Frontline Equity Fund Offer 15% Returns in 5 Years?

Published By POONAM SHARMA, 13 Sep 2018

Can ABSL Frontline Equity Fund Offer 15% Returns in 5 Years?
 A lot of political risk is going in the current market, which is one of the major events that is affecting the growth. So, the investors who are looking for long-term capital appreciation are suggested to invest in the mutual funds. For such capital appreciation, investors can invest in the fund that has been offering magnificent returns from the past many years consistently which is Aditya Birla Sun Life Frontline Equity Fund. The fund has managed to cap the negative markets efficiently in the years 2008, 2011, and 2015. So, let’s see what fund stores in its future for the investors in the article further.

An Outlook of ABSL Frontline Equity Fund

Providing high exposure to large-cap stocks, the fund is suitable for the investors with a moderately high-risk appetite. The scheme is good for investors currently, as the mid and small-caps are going into correction and large-caps are offering high returns. Besides this, it has generated positive alpha even in weak market situations beating category’s average to provide good returns to investors

Asset Allocation of
ABSL Frontline Equity Fund (G)

As the pie-chart showing, Aditya Birla Sun Life Frontline Equity Fund is investing majorly in equity and equity-related securities. A small portion is invested in the debt and money-market instruments to keep the mandatory liquidity in the portfolio.

Currently, the fund is investing its average market capitalisation of Rs 116,587.58 Cr in 70 stocks. The portfolio turnover ratio of it is just 55%. That shows that the fund manager and fund management team is focused on a few stocks and invest through buy and hold principle.

Looking at the sector allocation of the fund, it has a major investment in the financial sector. This is followed by FMCG, technology, automobile, energy, healthcare sectors. This sector allocation shows that the fund is investing most of its corpus in cyclical and defensive sectors. Only a small corpus is invested in sensitive sectors which help the fund to generate regular returns in various market cycles. This allocation is within the defined limit of 25% of the benchmark weightage or 3% absolute, whichever is higher.

The fund management team manages sector exposure within a certain range of sectoral weight

Past Performance and Risk Measures of
ABSL Frontline Equity Fund (G)

As we look after the past year compounded returns of Aditya Birla Sun Life Frontline Equity Fund growth, it has always beaten its benchmark and peers providing high returns to investors. The disciplined approach of investment by the fund has helped it in achieving the goal of wealth creation with equity investments.

The risk measures of the fund also show that the fund is less volatile than its benchmark. Its SD is 12.68% (as provided on Aug 31, 2018), which is less than other category funds, beta and alpha are also outperforming the peers, which shows that it has performed well in the past years.

If an investor has invested the amount of Rs 1,000 via SIP mode on a monthly basis since Sept 01, 2013, then the total amount invested till Sept 01, 2018 is Rs 61,000. However, the total worth of investment would be Rs 86,485 as on Sept 01, 2018. This shows that the fund has generated the returns with the rate of 18% approximately in the past five years. So, if an investor is looking for investment in ABSL Frontline Equity Scheme G, then he may get the returns of 12% to 15% in the next five years.

All this return analysis shows that the fund has the capability to offer the long-term returns, in the current market, it is indeed a best-suited plan for investors.

Looking for investment in Aditya Birla Sun Life Frontline Equity Fund? See how much return the fund can offer in the long run.