The Hindu Business Line : Sundaram Select Focus

THE month of July 2005 saw the market in an upbeat mood with the Sensex and Nifty achieving significant gains. There were also sharp reactions to the first quarter results/guidance announced during the month. Strong inflows from FIIs and net buying by domestic mutual funds added buoyancy to the equity market. We take a look at how Sundaram Mutual Fund re-jigged the portfolio of Sundaram Select Focus scheme during July.

Sundaram Select Focus is an open-ended equity speciality fund, which aims at achieving capital appreciation through investment in select stocks across various sectors. The fund has a concentrated portfolio with the top ten holdings accounting for about 60 percent of the scheme's equity value as of July 2005.

A sector-wise analysis revealed that more than 30 per cent of the holdings were concentrated in stocks of banks and engineering companies.

The fund's cash, call and current assets position increased by 48 per cent over the month due to reduction in exposures to IT and energy stocks. The reduction can be attributed to the increasing burden of subsidies for oil companies and less- than-expected performance of software companies.

While the fund completely exited from Hindustan Petroleum, it pared exposures to ONGC, Infosys and TCS.

Sundaram Select Focus increased the weight of cement with exposures in Grasim Industries. The stock constituted 2 per cent of the portfolio.

In the consumer goods sector the fund had considerably reduced its exposures to Stoppers Stop. The holding in the stock was trimmed by nearly 50 per cent. It retained its overweight position on Tata Tea and Balrampur Chini Mills.

The fund appeared to have taken an optimistic view of the capital goods sector. Sundaram Select Focus was launched in 2002. The fund had a net asset value of Rs 59.1 crore as of July 29, 2005 and is managed by Ms Srividhya Rajesh.

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