34 Aditya Birla Sun Life Mutual Fund Schemes Reclassification – Should you continue or exit?

Aditya Birla Sun Life Mutual Fund Schemes Reclassification - Should you continue or exit-minAditya Birla Sun Life Mutual Fund Schemes Reclassification – Should you continue or exit?


After SBI Mutual Funds reclassification, now Aditya Birla Sun Life Mutual Fund AMC has indicated to its investors that it is reclassifying its mutual fund schemes based on direction from SEBI. Aditya Birla Sun Life Mutual Fund is going to reclassify almost 34 mutual fund schemes by either renaming or changing its investment objectives etc., With this change in investment objective, there would be slight change in their mutual fund scheme performance in future. What is the reclassification changes done by Aditya Birla Sun Life Mutual Fund AMC across these 34 mutual fund schemes? Which Mutual Funds are getting effected with such reclassification and categorization of mutual fund schemes? Should you continue to invest in them or exit? Do Aditya Birla Sun Life Mutual Fund is giving an option to exit if investors do not like it?

Also Read: SBI Mutual Fund Schemes reclassified 38 mutual Fund Schemes – Should you continue or exit them?

What is reclassification and categorization of mutual fund schemes?


SEBI issued new norms / guidelines on mutual fund schemes few months back and all such schemes should be categorized into 5 baskets only.

5 Baskets are Equity, Debt, hybrid, solution oriented and other mutual fund schemes.

Mutual Fund Houses cannot launch similar schemes in same theme. Means, there would not be any duplicate plans which AMC can lauch or run.

Sebi has said the one-scheme-per-category rule will not be applicable to exchange-traded funds (ETFs) tracking different indices; fund-of-funds having different underlying schemes; and sectoral and thematic funds investing in different sectors.

Mutual Fund Houses (AMC) were asked to submit their proposal of their existing schemes along with categorization of the schemes. This took place in the last 4-5 months.

SEBI provided guidelines about the classification of largecap, midcap and small schemes. First 100 companies in market capitalization are termed as large cap, First 101 to 250 companies are termed as mid-cap companies and after 250+ market capitalization are termed as smallcap companies. Association of Mutual Funds of India (AMFI) would update this data twice on their website which would be basis where mutual fund schemes can invest based on their investment objectives. This would apply to all existing open ended mutual fund schemes which got SEBI clearance, however yet to be launched and for all schemes where draft documents submitted which are pending with SEBI for approval.

34 Aditya Birla Sun Life Mutual Fund Schemes Reclassification – What does this mean?


Aditya Birla Sun Life Mutual Funds reclassification are done across all their schemes and here is the summary of changes.

1) Change in mutual fund scheme names – 17 Mutual fund schemes

2) Change in fundamentals of the mutual fund scheme – 16 mutual fund schemes

3) Change in type of the MF scheme – 18 schemes

Some of the schemes have name changes + fundamentals change, hence the total of above is greater than 34 count.

34 Aditya Birla Sun Life Mutual Fund Schemes Reclassification – Should you continue or exit?


Now let us look at majority of the Aditya Birla Sun Life Mutual Fund schemes which got changed and its impact.

1) Aditya Birla Sun Life Equity Fund


Many of us have invested in this mutual fund scheme. While there is no change in mutual fund scheme name. There is change in investment objective and asset allocation

Existing Investment Objective: Open ended mutual fund growth scheme

Proposed investment objective: Open ended equity scheme investing across large cap, mid cap, small cap stocks.

Snice there is no major change in investment objective, you don’t need to worry too much on this change.

2) Aditya Birla Sun Life Infrastructure Fund.

Many of us would have invested in this Infra mutual fund where I indicated that one can get their money doubled in next 3-5 years by investing in such top performing Infra Mutual Fund Schemes. Here are the changes in this scheme.

Existing Investment Objective: Open ended mutual fund growth scheme

Proposed investment objective: Open ended equity scheme investing in Infra sector.

The benchmark is changed from NIFTY50 to NIFTY Infrastructure.  Snice there is no major change in investment objective, you don’t need to worry too much on this change.

3) Aditya Birla Sun Life Manufacturing Fund


Some of you would have invested in this Manufacturing mutual fund scheme. Here are the changes.

Existing Investment Objective: Open ended manufacturing sector scheme.

Proposed investment objective: Open ended equity scheme following the manufacturing theme.

No major change in investment objective, you can continue to invest in this MF scheme.

4) Aditya Birla Sun Life Banking & Financial Services Fund


Its only recategorization in specific bucket that it is now a equity mutual fund scheme that invests in banking and financial services sector.  No major change in investment objective, you can continue to invest in this MF scheme.

5) Aditya Birla Sun Life International Equity Fund – Plan A


Its investment objective was as “diversified mutual fund scheme” which is now changed to mutual fund scheme that invests only in global equities. This is how the scheme was supposed to be for international fund, hence you don’t need to worry.

6) Aditya Birla Sun Life International Equity Fund – Plan B


Its investment objective was as “diversified mutual fund scheme” which is now changed to mutual fund scheme that invests only in global equities and Indian equities. This is how the scheme was supposed to be for international fund Plan-B, hence you don’t need to worry.

7) Aditya Birla Sun Life Commodities Equities Fund – Global Agri Plan


Its investment objective was as “diversified mutual fund scheme” which is now changed to mutual fund scheme that invests only in global agri theme. You don’t need to worry too much as it is only change in naming convention.  

8) Aditya Birla Sun Life Tax Relief '96


Many of us would have invested in this Tax Saving mutual fund scheme. Here are the changes.

Existing Investment Objective: Open ended ELSS Scheme with a lock-in period of 3 years.

Proposed investment objective: An open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit.

Snice there is no change in investment objective, you don’t need to worry too much on this reclassification or categorization.

9) Aditya Birla Sun Life Enhanced Arbitrage Fund renamed to Aditya Birla Sun Life Arbitrage Fund


This fund is renamed to Aditya Birla Sun Life Arbitrage Fund. Earlier it was classified as simple equity growth mutual fund scheme. Now it categorized to an open ended scheme investing in arbitrage opportunities.  There is change in benchmark from CRISIL Liquid Fund Index to NIFTY 50 Arbitrage. There could be change in performance of the company. If you are not in agreement of this change, you can exit from this mutual fund scheme.

10) Aditya Birla Sun Life Nifty ETF


The classified is changed from ETF to Nifty 50 ETF, hence investors don’t need to worry much.

11) Aditya Birla Sun Life SENSEX ETF


The classified is changed from ETF to SENSEX ETF, hence investors don’t need to worry much.

12) Aditya Birla Sun Life Gold  ETF


Earlier the provisions indicate simple Gold ETF, now the provisions indicate that it would track physical price of the gold. Mutual fund investors need not worry much on this change.

13) Aditya Birla Sun Life Gold  Fund


This fund was classified that it as fund of fund. Now the provisions say it would invest in Aditya Birla Sun Life Gold ETF. If you are investing in this Gold fund, you can switch to Aditya Birla Sun Life Gold ETF as there is no point in investing in fund which invests in another fund.

14) Aditya Birla Sun Life Global Commodities Fund


This fund was classified that it as fund of fund. Now the provisions say that it was an open ended fund of funds scheme investing primarily in units of global mutual funds which invest in commodity related securities. There is no major change in this fund. Stay invested.

15) Aditya Birla Sun Life Global Real Estate Fund


Earlier it was open ended fund of fund scheme. Now it is classified as an open ended fund of funds scheme investing predominantly in Global mutual funds that invest in real estate securities. There is no major change in the funds provisions, you can ignore this change.

16) Aditya Birla Sun Life Pure Value Fund


This fund is categorized now as an apen Ended equity scheme following a value investment strategy. The bench mark is changed from S&P BSE 200 to S&P BSE Enhanced Index Value. The change is only compared to benchmark, actual performance may not have any impact.

17) Aditya Birla Sun Life India Gennext Fund


I have been recommending this scheme for some time in some of the top performing mutual funds category. This scheme is now classified as an open ended equity scheme following Consumption theme. The benchmark is changed from NIFTY50 to S&P BSE 500. No major change in other fundamentals/investment objectives, you can continue to invest in this scheme.

18) Aditya Birla Sun Life MNC Fund


This is one of the good mutual fund scheme in MNC funds category.

It was classified as an open ended growth scheme following the MNC theme in its investments. No major change, investors can continue to invest in this mutual fund scheme.

19) Aditya Birla Sun Life Enhanced Arbitrage Fund renamed to Aditya Birla Sun Life Arbitrage Fund


This name change is effective from 21st May, 2018. No change in investment objectives.

20) Aditya Birla Sun Life Midcap and smallcap fund renamed to Aditya Birla Sun Life Smallcap fund


It was earlier investing in midcap and smallcap stocks. Now it would invest predominantly in small cap stocks.  If you already have other smallcap funds in your portfolio, you may review and exit this fund.

21) Aditya Birla Sun Life Top 100 Fund renamed to Aditya Birla Focussed Equity Fund


It was growth scheme earlier. Now it has become large cap mutual fund that invests in maximum 30 stocks.  If you already have other top performing largecap funds in your portfolio, you can check and exit

this fund.

22) Aditya Birla Sun Life Midcap Fund


It was open ended scheme earlier, now moved to simple midcap fund which invests in midcap stocks only.

23) Aditya Birla Sun Life Balanced Fund renamed to Aditya Birla Sun Life Equity Hybrid 95 Fund

Balance 11 funds can be read from their website directly

Complete list of 34 Aditya Birla Sun Life Mutual Fund Schemes reclassification or categorization can be downloaded from this link.

What should you do if you don’t like the change in mutual fund scheme?


Aditya Birla Sun Life Mutual Fund AMC is giving an option to investors:

1) If you don’t like these changes, investors are giving an option to exit the mutual fund or switch to another scheme from 19th April to 18th May, 2018 with zero exit load option. If you want to exit / switch after 18th May, necessary exit load applies.

2) If you want to continue with the mutual fund scheme, you don’t need to do anything. However you need to check the renamed MF schemes (wherever applicable) for your future tracking.

Conclusion:  You can go through Aditya Birla Sun Life Mutual Fund Schemes you are investing, changes in its investment objective and categorization in largcap, midcap and small cap segment to understand whether there are any major changes in mutual fund schemes. Other related changes like portfolio mix, Change in MF scheme name etc., can be given secondary preference. If you think that a mutual fund scheme has undergone drastic change (diversified fund now become largecap fund) and you are not in agreement with that you can exit them before 18th May, 2018 and get benefit of zero exit load. Othewise, you can continue.

All the best Aditya Birla Sun Life Mutual Fund Scheme Investors !!!

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Suresh

Aditya Birla Sun Life Mutual Fund Schemes Reclassification – Should you continue or exit

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I have done by B.Com from Osmania University and then MBA-Finance from Symbiosis University, Pune. I have over 20 years of experience in analyzing various investment options and money saving ideas. I love doing financial planning, Mutual Fund Analysis, Searching long term Stocks for wealth creation, IPOs, reviewing Insurance Products, analysing Health insurance Plans etc.

4 Comments

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  1. I have inverted in Aditya Birla sun life frontline equity fund. Should I continue with it? 

    1. You can continue to invest in this fund

  2. Hi Suresh,

    I have few investments into ABSL India Reforms fund. Now it is going to be merged with ABSL infrastructure fund. Not sure of the portfolio after the merger of those two schemes. Would you advice to continue the ongoing monthly SIP of 2k .?

    1. Hi Danny, now it would focus more on Infra sector investment objective. Aditya Birla Infra fund is good fund in Infra sector. If you wish to invest in Infra sector, you can continue to invest in this, else exit before the cut-off date

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