ABSLMF is a joint venture between the Aditya Birla Group and Sun Life Financial, Inc. (ABSLMF). It offers services to investors from all across India through its wide network. Whether you live in a large metropolis or a small town, you can easily access its services.
ABSLMF now manages 92 mutual fund schemes, including 34 debt schemes, 41 equity schemes, 13 hybrid schemes, and four miscellaneous schemes. The question is investing in Aditya Birla funds Safe? Let’s find out.
SEBI Regulation
ABSLMF is regulated by the Securities and Exchange Board of India (SEBI). The regulator ensures transparency, investor protection, and adherence to the rules.
SEBI has also laid guidelines to address investors’ grievances and prevent fraudulent practices and insider trading. It has also instructed mutual fund AMCs to follow the advertising criteria and only use marketing materials that satisfy the required standards.
Credibility
The investors’ trust in ABSLMF can be seen in its Assets Under Management (AUM). By the end of December 31, 2023, the company had a total AUM of Rs. 3,247 billion. Not only that, this AMC services around 7.98 million investor folios.
Regarding returns, one of the schemes named ABSLMF Term Direct Plan’s annualised returns over the past three years averaged around 13.26%, and over five years, they were approximately 8.91%. Their consistent performance demonstrates reliability and expertise.
Diversification
Diversification lowers the risk associated with a mutual fund portfolio. A solid portfolio has a balanced exposure to both equities and debt. ABSLMF offers the Aditya Birla Sun Life Regular Savings scheme, a hybrid product, to ensure diversification.
Risks Associated With Aditya Birla Funds
Now that you know the features of investing with ABSLMF, let’s look at some risk factors involved when you invest in mutual funds via an online investment platform such as Dhan.
Market Volatility
As you know, mutual funds invest in multiple asset classes. The market of these securities can be volatile due to economic, political, or global events. If there is a significant fluctuation, the fund’s NAV might fall, affecting your investment value.
Equity Market Risk
Equity funds invest primarily in stocks, whose prices can rise or fall rapidly. Factors like company performance, industry trends, and market sentiment influence equity returns. Remember that higher returns are accompanied by higher risk.
Interest Rate Risk
ABSLMF debt funds invest in fixed-income securities like bonds and debentures. When interest rates rise, bond prices fall, affecting debt fund NAV. It is important to note that the longer-duration bonds are more sensitive to rate changes.
Liquidity Risk
Some Aditya Birla funds invest in illiquid assets, such as real estate and small-cap stocks. Selling illiquid assets during market stress can be challenging, and redemption pressure may force the fund to sell at unfavourable prices.
Systematic Risk
Systematic risk affects the entire market. Events like economic recessions, geopolitical tensions, or natural disasters impact all investments. Even if a fund has a well-diversified portfolio, it is not immune to systematic risk.
Conclusion
Investing in Aditya Birla Mutual Funds offers security and potential returns. Regulated by SEBI, ABSLMF ensures transparency and investor protection. A substantial AUM and consistent performance demonstrate this fund house’s credibility. Yet, always consider market volatility, equity market fluctuations, interest rate changes, liquidity challenges, and systematic risks.
