Birla Sun Life Pure Value Fund

Birla AMC has launched a Mutual fund "Birla Sun Life Pure Value Fund" which is a 3-year Closed-end Equity Scheme with an Automatic Conversion into an Open-Ended Scheme upon Maturity. Birla Sun Life Pure Value Fund seeks to generate consistent longterm capital appreciation by investing predominantly in equity and equity related securities by following value investing strategy.

Value investing is buying into stocks that are trading for less than their intrinsic value - stocks that the market is undervaluing. Typical value investing strategies include, strategies like

• Buying stocks with a low price to book value,
• Low price to cash flow
• Low price/earning multiple, and high dividend yields
• Asset Replacement
• Dividend Yield higher than the G-Sec yield
• Valuation mismatch due to invisible/under valued assets (Land, Licenses, Brands, Trademarks,
Patents etc.)
• Situations wherein the value of the Company would be unlocked due to
o Mergers and Acquisition activities
o Restructuring
o Recovery potential
o Retained earnings

Key underlying assumption in Value Investing is that markets are inefficient and over a period of time the market will discover and find the right value for the stock.
Value strategy, is a conservative way of investing in Equities. The primary reason is that these stocks are already available at a substantial discount relative to the general market levels. As such the downside in such stocks is relatively lesser.
The value strategy, while being a blend of Top down and Bottoms up, essentially focuses on companies with long track records and excellent managements. As such the probability of these companies to improve their fundamentals with changing business dynamics is relatively strong.

Under normal circumstances, the asset allocation pattern of the scheme shall be as under:
Equity and Equity Related Instruments: 85% - 100%
Debt and Money Market Instruments (including Securitised Debt): 0 – 15%

Scheme Details
Issue Opens: January 17, 2008
Issue Closes: March 1, 2008
Type: close-ended, equity scheme
Plan : Dividend Option,Dividend Reinvestment, Growth Option
Minimum Investment: Rs. 5,000. Additional amount in multiples of 1 thereafter
Entry Load: Nil as it is a close ended scheme
Exit Load: Nil (for all redemptions/switch outs made during the specified redemption period until the scheme remains closed-end).However, investors offering units for repurchase/ switch out during the specified redemption periods before maturity of the scheme/conversion of scheme into open ended scheme will be charged balance proportionate unamortized issue expenses on the applicable NAV
Benchmark : BSE 200
Liquidity : The scheme will offer for redemption/switch-out of units at Monthly Intervals at NAV based prices. The redemption/switch-outs will be available only during the specified redemption period i.e. first five business days of each month after the date of allotment. The NAVs of the scheme will be announced on a weekly basis and on all business days during the specified redemption period.
Initial Issue Expenses: Entry Load collected during the NFO period shall be utilised to meet the NFO expenses. Remainder of the New Fund Offer expenses, if any, shall be borne by the AMC.