The Hindu Business Line : Sundaram MF plans `Leadership Fund'

SUNDARAM MF has worked out its first thematic scheme, one that will invest in companies that have emerged as `leaders' in their respective businesses. The proposed Sundaram India Leadership Fund will invest in equities, equity futures & options and money market instruments. Up to 100 per cent of its assets may be allocated to equities, including ADRs and GDRs.

The scheme, the offer document sent to SEBI has mentioned, will have a diversified set of companies in its portfolio, made up of stocks of companies commanding leadership positions in their sectors/sub-sectors.

Such players are expected to fare better than their peers, which are placed lower in terms of revenue growth and profitability during economic upswings. However, profits and stock prices of these entities may not always rise at a pace faster than that of firms occupying the lower positions.

Mr T.P. Raman, Managing Director of Sundaram MF, observed that the economy has thrown up a number of sector leaders in recent days.

"The potential of certain sectors has been particularly underlined. The trend is likely to become stronger in future," he said.

The idea is to weigh the possibility of investing in the top few companies in each area on the basis of parameters like net revenue or total income.