The Hindu Business Line : Sundaram Growth

AUGUST was a month marked by volatility in the market. Even as the momentum in the large-cap space slowed down, the small and mid-caps bucked the trend, making significant gains during the month.

There were also shocks to the market in the form of Hurricane Katrina, new highs in crude prices and a fall in FII inflows compared to the previous month. Domestic mutual funds, however, remained optimistic, as reflected by the net buying of more than Rs 2000 crore in August from a position of being net sellers in June.

We take a look at how Sundaram Mutual Fund managed its Sundaram Growth portfolio for August. Sundaram Growth is an equity fund that aims at capital appreciation by investing in a basket of well-diversified equities and equity related instruments.

A sector-wise analysis revealed that the top three sector holdings of software, electric equipment and refineries accounted for 30 per cent of total equity assets.

The fund appears to have taken a cautious approach in August and pared exposures to construction, automobile and banking. Profit-booking in Bajaj Auto saw an exit from the two- and three-wheeler category. And exposures were pruned in Tata Motors and Mahindra & Mahindra. IVRCL Infrastructures and Projects also lost favour as the fund exited from the stock.

A near 50 per cent cut in the fund's holdings in State Bank of India and a 30 per cent reduction in the exposure to ICICI bank saw the total weightage given to banking stocks slide more than 3 per cent. Weightage to IT stocks remained largely unchanged except for a trimming in Satyam and addition to Wipro.

Among the recent spate of public offers that the fund had subscribed to, Yes Bank and IL&FS Investmart made an exit during the month while IDFC stayed in the portfolio.

Mangalore Refinery and Welspun Gujarat made fresh entry into the fund's portfolio.

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