How Aditya Birla Sun Life MF, one of India's first global Gift City funds, works
Aditya Birla Sun Life Mutual Fund launched one of India’s first global funds from Gift City (registered with the International Financial Services Authority or IFSC) last year. It had its first close in September 2023, raising $33 million, mostly from resident Indians and institutions.
The fund is a close-ended Category II alternative investment fund or AIF. It has a term of 4.5 years, which can be extended by another year with the consent of two-thirds of its investors. It will feed into the ARGA Emerging Market Equity Fund. ARGA is a US- based asset manager with about $15 billion worth of assets globally.
The underlying fund actively picks 35-80 companies in emerging markets. It is mostly exposed to China, South Korea, Taiwan, and Brazil. Its major holdings are TSMC, Gree, SK Hynix, Alibaba, and Samsung. In terms of sectors, it is dominated by financial services, consumer discretionary, and technology.
The ABSL Emerging Market Equity fund has a graded expense ratio for investors depending on how much they invest. For the direct plan variant (Class B1) at the lowest ticket size, this comes to 1.25%.
The expense ratio reduces for higher ticket sizes as per a defined slab rate. The underlying fund has delivered returns (net of withholding taxes and fees) of 10.5% in the past year, 4.2% in the past three years and 7.1% in the past five years (as of April 2024).
These are returns in US dollars. It has beaten the MSCI Emerging Markets Index (Net) over all these periods. As for the ABSL Emerging Equity Fund, it is up 10.65% over the past six months and 5.67% since inception on 6 September 2023.
“Valuation for emerging markets as a whole looks attractive, with Brazil and China being significantly cheaper than advanced
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