KEY INFORMATION MEMORANDUM
BIRLA SUN LIFE SMALL & MIDCAP FUND
(An Open ended Small and Mid Cap Equity Scheme)
Continuous Offer for Units at NAV based prices.
NAME OF THE ASSET MANAGEMENT COMPANY
NAME OF MUTUAL FUND
BIRLA SUN LIFE ASSET MANAGEMENT COMPANY
LIMITED
One Indiabulls Centre, Tower-1, 17th floor, Jupiter Mill
Compound, 841, Senapati Bapat Marg, Elphinstone
Road, Mumbai - 400 013
Tel.: +91-22 43568000
Fax No. +91-22 43568110 / 8111
BIRLA SUN LIFE MUTUAL FUND
One India Bulls Centre, Tower 1, 17th Floor, Jupiter Mill
Compound, 841, Senapati Bapat Marg, Elphinstone
Road, Mumbai - 400 013
Tel. +91-22 43568000
Fax No. +91-22 43568110 / 8111
Website www.birlasunlife.com
The Scheme was launched as a Close ended Small and Mid Cap equity scheme with a maturity period of 3 years (from the date
of allotment) with an automatic conversion into an Open ended Scheme upon maturity. The NFO of the scheme was kept open
from April 09, 2007 to May 18, 2007, and the allotment under the scheme made on May 31, 2007. The maturity date for the
scheme falls on May 31, 2010 (May 30, 2010 being a non-business day).
Accordingly, as per the provisions of the Offer Document, the scheme stands automatically converted into open ended scheme
w.e.f. June 01, 2010 and available for ongoing purchase/switch-in and redemption/switch-out from June 8, 2010, i.e. after a book
closure period of 7 days from Maturity date. The scheme was earlier known as Birla Sun Life Long Term Advantage Fund-Series
1 and the name of the scheme was revised to Birla Sun Life Small & Midcap Fund w.e.f August 12, 2010.
This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing.
For further details of the scheme/Mutual Fund, due diligence certificate by the AMC, Key Personnel, investors’ rights &
services, risk factors, penalties & pending litigations etc. investors should, before investment, refer to the Scheme
Information Document and Statement of Additional Information available free of cost at any of the Investor Service
Centres or distributors or from the website www.birlasunlife.com.
The Scheme particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds)
Regulations 1996, as amended till date, and filed with Securities and Exchange Board of India (SEBI). The units being
offered for public subscription have not been approved or disapproved by SEBI, nor has SEBI certified the accuracy or
adequacy of this KIM.
Key Information Memorandum
Name of the Scheme
Birla Sun Life Small & Midcap Fund
(erstwhile Birla Sun Life Long Term Advantage Fund-Series 1)
Investment Objective
The Scheme seeks to generate consistent long-term capital appreciation by
investing predominantly in equity and equity related securities of companies
considered to be small and mid cap. The Scheme may also invest a certain portion
of its corpus in fixed income securities including money market instruments, in
order to meet liquidity requirements from time to time
For the purpose of the Scheme, “Mid Cap” is defined as those stocks, which would
fall in the market capitalization range of S&P CNX Midcap index. The current
market capitalization range of S&P CNX Mid Cap is around ` 2,600 crores to
`18,000 crores. The Companies having market capitalization below this range
shall be considered as Small Cap stocks and the Companies falling above this
range shall be considered as Large Cap stocks.
Inception date
The Scheme was launched as a Close ended Small and Mid Cap equity scheme
with a maturity period of 3 years (from the date of allotment) with an automatic
conversion into an Open ended Scheme upon maturity. The NFO of the scheme
was kept open from April 09, 2007 to May 18, 2007, and the allotment under the
scheme made on May 31, 2007. The maturity date for the scheme falls on May 31,
2010 (May 30, 2010 being a non-business day).
Accordingly, as per the provisions of the Offer Document, the scheme stands
automatically converted into open ended scheme w.e.f. June 01, 2010 and
available for ongoing purchase/switch-in and redemption/switch-out from June 8,
2010, i.e. after a book closure period of 7 days from Maturity date.
Asset
Allocation
Pattern of the Scheme
Under normal circumstances, the asset allocation pattern for the scheme shall be
as under
Instruments
Risk profile
Indicative allocations
(% of total assets)
Minimum
Maximum
Equity
and
Equity
Linked
instruments of Small and Mid
Cap companies out of which
(Small Cap 10%-50% Mid Cap
35% - 100%)
Medium to high
65
100
Other equity and equity related
securities including derivatives
Medium to High
0
35
Fixed
Income
Securities*
(including
Money
market
instruments)
Low to medium
0
35
* Investment in securitised debt papers may be made upto 20%.
•
The scheme may also invest up to 50% of the net assets of the scheme in
such derivative instruments as may be introduced from time to time for the
purpose of hedging and portfolio balancing.
•
The scheme may investment in overseas financial assets in accordance with
guidelines as stipulated by SEBI from time to time. Under normal
circumstances, the Scheme shall not have an exposure of more than 25% of
its net assets in foreign securities, subject to regulatory limits.
•
Should the Fund Manager desire to engage in Stock Lending, it will apply the
following limits:
i.
Not more than 20% of the net assets of the Scheme can generally be
deployed in Stock Lending.
ii.
Not more than 5% of the net assets of the Scheme can generally be
deployed in Stock Lending to any single counter party.
Birla Sun Life Small & Midcap Fund
Page 2
Key Information Memorandum
Investment Strategy
The corpus of the Scheme will be primarily invested in Small and Mid Cap equity
and equity related securities of the companies in the small and midcap segment
that have a potential to appreciate in the long run. The Scheme may also invest a
small portion of its corpus in fixed income securities including money market
instruments to manage its liquidity requirements. The fund manager will select
equity securities on a bottom-up stock selection approach. Under bottom-up
approach, the main focus is on identifying stocks on their individual merits
irrespective of the sectors to which they belong as opposed to first identifying
sectors and then choosing stocks within that sectors which is followed under topdown approach. Hence, under bottom-up approach among other things,
consideration will be given to fundamentals of the companies, management quality
& strength of their businesses.
Apart from sound fundamentals and management, the fund would lay emphasis on
valuations and long term growth potential. The stocks of small and midcap
companies are generally more volatile and less liquid than the large cap stocks.
The focus would be on long-term fundamentally driven values. However, shortterm opportunities would also be seized, provided they are supported by
underlying values. As part of the investment strategy, fund will book profits
regularly to take advantage of the volatility in the market.
Risk Profile of the
Scheme
Risk Control
Mutual Fund Units involve investment risks including the possible loss of principal.
Please read the SID carefully for details on risk factors before investment.
Scheme specific Risk Factors are summarized below:
•
The investments under the Scheme will be concentrated in the Small and Mid
Cap segment and hence may perform differently than a broad market portfolio.
Small and Mid Cap stocks are generally more volatile and less liquid as
compared to Large Cap stocks. Further Scheme’s performance may differ from
the benchmark index to the extent of the investments held in the debt
segment, as per the investment pattern indicated under normal circumstances.
•
Investing in companies which are part of the CNX Midcap Index stocks is
based on the premise that relatively small and midcap companies will increase
their earnings and grow into larger, more valuable companies. However, as
with all equity investing, there is the risk that a company will not achieve its
expected earnings results, or that an unexpected change in the market or
within the company will occur, both of which may adversely affect investment
results. Historically, stocks which are part of the CNX Midcap Index stocks
have experienced greater volatility and they may be less liquid than larger cap
stocks. Thus, relative to larger, more liquid stocks, investing in small and
midcap stocks, involves potentially greater volatility and risk. The biggest risk
of equity investing is that returns can fluctuate and investors can lose money.
Investments made by the scheme would be in accordance with the investment
objectives of the scheme and provisions of SEBI Regulations. Since investing
requires disciplined risk management, the AMC would incorporate adequate
safeguards for controlling risks in the portfolio construction process. The risk
control process involves reducing risks through portfolio diversification, taking
care however not to dilute returns in the process. The AMC believes that this
diversification would help achieve the desired level of consistency in returns. The
AMC aims to identify securities, which offer superior levels of yield at lower levels
of risks. With the aim of controlling risks, rigorous in-depth credit evaluation of the
securities proposed to be invested in will be carried out by the investment team of
the AMC.
The Scheme may also use various derivatives products for the purpose of hedging
and portfolio balancing from time to time, in an attempt to protect the value of the
portfolio and enhance Unitholders’ interest
While these measures are expected to mitigate the above risks to a large extent,
there can be no assurance that these risks would be completely eliminated.
Plans/Options
The scheme offers Growth Option and Dividend Option. The Dividend Option shall
have payout and reinvestment facility. Default option – Dividend Payout
Birla Sun Life Small & Midcap Fund
Page 3
Key Information Memorandum
Applicable NAV
For Subscriptions/Purchases Including Switch-In:
• In respect of valid applications received upto 3.00 p.m. by the Mutual Fund
alongwith a local cheque or a demand draft payable at par at the place where
the application is received, the closing NAV of the day on which application is
received shall be applicable.
• In respect of valid applications received after 3.00 p.m. by the Mutual Fund
alongwith a local cheque or a demand draft payable at par at the place where
the application is received, the closing NAV of the next business day shall be
applicable.
For Redemptions/Sales Including Switch-Out:
• In respect of valid applications received upto 3.00 p.m. by the Mutual Fund,
same day’s closing NAV shall be applicable.
• In respect of valid applications received after 3.00 p.m. by the Mutual Fund, the
closing NAV of the next business day shall be applicable
Minimum Application
Amount / Number of
Units
Purchase (Incl Sw itch-in)
Additional
Sw itch-in)
Purchase
(Incl
Minimum of ` 5,000/- and in
multiples of ` 1/- thereafter on
an ongoing basis.
Minimum of ` 1,000/- and in
multiples of ` 1/- thereafter on
an ongoing basis.
Repurchase
In Multiples of
` 1/-
Despatch of Proceeds
of Repurchase
(Redemption) Request
Within 10 working days of the receipt of the redemption request at the official
points of acceptance of Birla Sun Life Mutual Fund.
Benchmark Index
S&P CNX Midcap Index.
The fund reserves the right to change the benchmark for evaluation of the
performance of the scheme from time to time, subject to SEBI Regulations and
other prevailing guidelines if any.
Dividend Policy
Under Dividend Option, it is proposed to declare dividends subject to the
availability of distributable surplus as computed in accordance with SEBI
Regulations. Dividends, if declared, will be paid (subject to deduction of tax at
source, if any) to those unitholders, whose names appear in the register of
unitholders on the notified record date. AMC reserves the right to change the
record date from time to time. However, it must be distinctly understood that
actual declaration of dividends and frequency thereof is at the discretion of
trustees. There is no assurance or guarantee to unitholders as to the rate of
dividend distribution nor that will the dividends be paid regularly. On payments of
dividends, the NAV will stand reduced by the amount of dividend paid and the
dividend distribution tax, if applicable.
Name of the Fund
Manager
Mr. Sanjay Chawla
Name of the Trustee
Company
Birla Sun Life Trustee Company Private Limited
Birla Sun Life Small & Midcap Fund
Page 4
Key Information Memorandum
Performance
Scheme
of
the
I. Compounded annualized returns (%) of Growth option as on March 31, 2011
Returns
Last 1
Year
Last 3
Years
Last 5
Years
Since
Inception*
Birla Sun Life Small & Midcap Fund
1.04
7.93
-
3.90
S&P CNX Midcap Index^
4.35
8.81
-
9.66
II. Yearw ise Returns (FY Apr-Mar)
*Inception-May 31, 2007
The above returns have been calculated for Growth Plan. Returns are in % and
absolute returns for period less than 1 year & CAGR for period 1 year or more.
Load not considered. ^Benchmark Index
Note : Past Performance may or may not be sustained in future
Expenses
Scheme
of
(i) Load Structure
the
New Fund Offer Period
The initial issue expenses shall be borne by the AMC.
Entry Load*: Nil
Exit Load: For redemption/switch-out of units within 365 days from the date of
allotment: 1.00% of applicable NAV. For redemption/switch-out of units after 365
days from the date of allotment: Nil.
*In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30,
2009, no entry load will be charged by the Scheme to the investor effective August
1, 2009. The upfront commission, if any, on investment made by the investor shall
be paid by the investor directly to the Distributor, based on his assessment of
various factors including the service rendered by the Distributor.
No exit load shall be charged in respect of units issued to unitholders on
Reinvestments of Dividends and units issued to unitholders as Bonus units.
No Exit Loads will be chargeable in case of switches made from Growth Plan to
Dividend Plan or vice-versa within the respective Plans offered under the Scheme
upon reopening
The above Load shall also be applicable in case of SIP/STP/Century SIP
transactions.
(ii)Recurring
expenses
Average w eekly net assets
Maximum, as a % of average w eekly net assets
First ` 100 crores
2.50%
Next ` 300 crores
2.25%
Next ` 300 crores
2.00%
Balance
1.75%
Actual expenses (unaudited) for financial year ended March 31, 2011: 2.38%
Birla Sun Life Small & Midcap Fund
Page 5
Key Information Memorandum
Waiver of Load for Direct
Not Applicable
Applications
Tax treatment for the
Investors
(Unitholders)
Investor are advised to refer to the details in the Statement of Additional
Information and also independently refer to his tax advisor.
Daily Net Asset Value
(NAV) Publication
The NAV will be declared on all the days and will be published in 2 newspapers.
NAV can also be viewed on www.birlasunlife.com and www.amfiindia.com
Investors can also call up at our toll free number 1-800-22-7000.
For Investor
Grievances please
contact
Birla Sun Life Asset
Company Limited,
Management
One India Bulls Centre, Tower 1, 17th
Floor, Jupiter Mill Compound, 841,
Senapati Bapat Marg, Elphinstone Road,
Mumbai 400 013.
Tel.: 1800-270-7000 / 1800-22-7000.
E-mail: connect@birlasunlife.com
Registrar & Transfer Agents:
Computer Age Management Services
Pvt. Ltd. (CAMS)
Rayala Towers, 158, Anna Salai,
Chennai - 600002.
Contact Details: 1800-425-2267
E-mail: birlasunlife@camsonline.com
Website : www.camsonline.com
Website: www.birlasunlife.com
Unitholders’
Information
Account Statements to the Unitholders invested under SIP/STP will be dispatched
once in every quarter ending March, June, September and December, within 10
working days of the end of the respective quarter. However, the first account
statement under SIP/STP shall be issued within 10 working days of the initial
investment. In case of specific request received from investors, Fund shall provide
the account statement to the investors within 5 working days from the receipt of
such request without any charges. Further, soft copy of the account statement
shall be mailed to the investors under SIP/STP/SWP to their e-mail address on a
monthly basis, if so mandated. Account Statements to the unit holders who have
not transacted during the last six months prior to the date of generation of account
statements, may be generated and issued along with the Portfolio Statement or
Annual Report of the scheme. Such Account Statement will reflect the latest
closing balance and value of the units prior to the date of generation of the
account statement. Further, soft copy of the account statements shall be mailed to
the investors’ e-mail address, instead of physical statement, if so mandated. No
Account Statements will be issued to investors opted to hold units in
dematerialized mode.
The Scheme wise annual report or an abridged summary thereof shall be mailed to
all Unit holders not later than four months from the date of closure of the relevant
accounting year and full annual report shall be available for inspection at the
Head Office of the Mutual Fund and a copy shall be made available to the Unit
holders on request on payment of nominal fees, if any. The mutual fund and Asset
Management Company shall before the expiry of one month from the close of each
half year that is on 31st March and on 30th September, publish its unaudited
financial results in one national English daily newspaper and in a regional
newspaper published in the language of the region where the Head Office of the
mutual fund is situated.
Investor who has provided his/her email address in the application form or any
subsequent communication in any of the folio belonging to the investor, Birla Sun
Life Mutual Fund (BSLMF) reserves the right to use Electronic Mail (email) as a
default mode for sending various statut ory communications to the investor.
Birla Sun Life Small & Midcap Fund
Page 6
Key Information Memorandum
Gist of Comparison with other schemes of Birla Sun Life Mutual Fund.
The Scheme's investment strategy is different from the investment strategies of the existing equity schemes
of the Fund as stated below and therefore the Scheme is different from the existing equity schemes:
Existing
Scheme Name
Asset Allocation
Primary Investment Focus
Differentiation AUM as
No. Of
from Birla Sun
on 31- Folios As
Life Small &
Mar-11
On 31Midcap Fund
(In Cr.)
Mar-11
348.77
41707
Birla Sun Life Equity & Equity related This is a Diversified Equity Fund which will This is the only
instruments: atleast 70% invest across sectors and market
scheme offered
Advantage
&
capitalizations to provide a diversified
by Birla Sun Life
Fund
Money market
exposure to equity stocks.
Mutual Fund
instruments: upto 30%
which seeks to
generate long
821.37
115141
Birla Sun Life Equity & Equity related The scheme aims to generate returns by
Dividend Yield instruments: upto 100% investing in high dividend-paying companies. term capital
&
Investing in stocks with high dividend yields appreciation by
Plus
investing
Cash & Money market is traditionally a ‘Defensive Investment
instruments: upto 10% Strategy’. Using this approach, the scheme predominantly in
targets to achieve returns higher than what equity & equity
related securities
would otherwise be available in interest
of Small &
bearing securities (Bonds, FDs, CDs,
Debentures etc.), but without taking undue Midcap
exposure to the vagaries of stock markets. companies (Small
cap - 10-50%,
443.47
107296
Birla Sun Life Equity & Equity related The corpus of the Scheme will be primarily
Midcap - 35% to
Infrastructure instruments: 80%- 100% invested in equity and equity related
100%)
securities of the companies in the
&
Fund
Money market
Infrastructure Sector.
instruments: upto 0 20%
100.00
17375
Birla Sun Life Equity & Equity related The primary investment objective of the
instruments: 80%-100% scheme is to generate long-term growth of
Basic
&
capital, through a portfolio with a target
Industries
Money market
allocation of 100% equity, focusing on
Fund
instruments 0%-20%
investing in companies sensitive to economic
cycles and commodity pricing cycles. The
investments will be in companies which are
often referred to as cyclical companies.
The Fund does not intend to invest in non
cyclical companies like FMCG, Healthcare
etc.
Birla Sun Life Equity & Equity related
instruments: 80%-100%
Buy India
&
Fund
Money market
instruments 0%-20%
A thematic fund focusing on Consumption
growth in India.
9355
949.05
105809
The primary investment objective of the
scheme is to generate long term growth of
capital, through a portfolio with a target
allocation of 100% equity, focusing on
investing in businesses that are driven by
India’s large population and inherent
consumption patterns. The focus of the
scheme will be in the consumer and
healthcare sectors.
Birla Sun Life Equity & Equity related This is a Diversified equity Scheme mainly
Equity Fund instruments: 80%-100% focused on growth based investment
&
approach
Money market
instruments 0%-20%
Birla Sun Life Small & Midcap Fund
44.76
Page 7
Key Information Memorandum
Existing
Scheme Name
Asset Allocation
Differentiation AUM as
No. Of
from Birla Sun
on 31- Folios As
Life Small &
Mar-11
On 31Midcap Fund
(In Cr.)
Mar-11
This is the only
2926.78
361817
Birla Sun Life Equity & Equity related The objective of the scheme is long term
instruments: 75%-100% growth of capital, through a portfolio with a scheme offered
Frontline
target allocation of 100% equity by aiming at by Birla Sun Life
Equity Fund &
Money market
being as diversified across various industries Mutual Fund
instruments 0%-25%
and or sectors as its chosen benchmark
which seeks to
index, BSE 200.
generate long
term capital
The Fund will always be invested across all appreciation by
the sectors that are represented in BSE 200. investing
The weights might change.
predominantly in
230.60
42970
Birla Sun Life Equity & Equity related The objective of the scheme is to achieve equity & equity
instruments: upto 100% long term growth of capital at relatively related securities
MNC Fund
&
moderate levels of risk by making of Small &
Debt & Money market
investments in securities of multinational Midcap
instruments upto 20 % companies through a research based companies (Small
cap - 10-50%,
investment approach
Midcap - 35% to
241.05
90656
Birla Sun Life Equity & Equity related The Scheme would follow an investment 100%)
instruments: 80%- 100% strategy that would take advantage of
Special
&
Special Situations and Contrarian investment
Situations
Fixed income
style. These 'special situations' entail very
Fund
instruments 0%- 20 %
low risk, and at the same time have a good
potential to boost returns by investing in
'special situations' like share buy-backs, delisting opportunities or during mergers and
acquisitions.
Birla Sun Life Equity & Equity related
Top 100 Fund instruments: 80%- 100%
,
(Top 100 Market Cap
Cos 65%- 100%,
Other Companies:0%35%)
&
Money market
instruments:0-20%
Birla Sun Life Equity & Equity related
India Gennext instruments: 80%- 100%
&
Fund
Fixed income
instruments 0%- 20 %
Birla Sun Life Small & Midcap Fund
Primary Investment Focus
This is a Large Cap oriented Fund. The
scheme seeks to provide medium to longterm capital appreciation, by investing
predominantly in a diversified portfolio of
equity and equity related securities of top
100 companies as measured by market
capitalization
The scheme targets growth of capital by
investing in equity/equity related instruments
of companies that are expected to benefit
from the rising consumption patterns in India,
which in turn is getting fuelled by high
disposable incomes of the young generation
(Generation Next). The scheme will invest in
companies
that have
the following
characteristics: 1. Companies that seek
growth in revenues arising out of demand
from the younger generation (GenNext) for
their products or services. 2. They should be
engaged in manufacturing of products or
rendering of services that go directly to the
consumer. 3. The products and services
should have distinct brand identity, thereby
enabling choice.
329.88
83298
85.03
18380
Page 8
Key Information Memorandum
Existing
Scheme Name
Birla Sun Life
India
Opportunities
Fund
Birla Sun Life
Midcap Fund
Birla Sun Life
India Reforms
Fund
Asset Allocation
Primary Investment Focus
Differentiation AUM as
No. Of
from Birla Sun
on 31- Folios As
Life Small &
Mar-11
On 31Midcap Fund
(In Cr.)
Mar-11
Equity & Equity related This fund will predominantly invest in the This is the only
49.23
17809
instruments: 70%- 100% Export Oriented companies, or companies scheme offered
&
that leverage on: 1. India's intellectual capital by Birla Sun Life
Cash & money market for providing services, research and creative Mutual Fund
instruments: 0%- 30 % inputs. 2. Seek to use current and impending which seeks to
changes in patent laws / import tariffs / generate long
quotas to supply goods and services. 3. term capital
Leverage India's lower labour costs for appreciation by
providing services and manufactured goods. investing
4. Leverage India's large population of predominantly in
English speaking people for providing equity & equity
services.
related securities
Equity & Equity related The investment objective of the scheme is of Small &
1611.14
195153
instruments: 65%- 100% long term growth of capital at controlled Midcap
(Equity and related
level of risk by investing primarily in ‘Mid- companies (Small
instruments of
Cap’ Stocks. The aim is to generate higher cap - 10-50%,
Companies other than
returns than a fund focused on large and Midcap - 35% to
100%)
Mid Cap companies 0- liquid stocks.
35%)
&
Cash, Deposits & Money
Market Instruments
including Mibor linked
short term papers 0-20%
Equity & Equity related This scheme invests across sectors that will
128.26
18766
instruments: 65%benefit from the Government's reforms
100% &
program. The focus will be on investing
Debt and Money Market across sectors that will benefit from
Instruments: 0-35%`
Government reforms including, reforms in
Education, Insurance, Banking, Power,
Agriculture & PSU Divestment.
The scheme will invest across sectors
without any market cap or sectoral bias.
This scheme seeks to generate consistent
Birla Sun Life Equity & Equity linked
instruments: 85%- 100% long term capital appreciation by investing
Pure Value
predominantly in equity and equity related
& Fixed Income
Fund
Securities (including
securities by following a value investing
Money market
strategy
instruments): 0-35%
16914
75.66
For Further details on asset allocation and investment pattern and investment strategy of each of the
schemes, please refer to the Scheme Information Document of the respective scheme.
Notw ithstanding anything contained in the Key Information Memorandum, the provisions of SEBI
(Mutual Funds) Regulations, 1996 and Guidelines thereunder shall be applicable. Further, investors
may ascertain about any further changes from the Mutual Fund/Investor Service Centres /Distributors
or Brokers.
Date: April 29, 2011
Birla Sun Life Small & Midcap Fund
Place: Mumbai
Page 9