The Hindu Business Line : Sundaram S.M.I.L.E: Metals, cement enhanced

The top ten holdings accounted for 36 per cent of the total assets. During the above quarter the fund pruned its holding in sectors such as auto, software and energy, and doubled exposure in consumer goods and engineering.

During the same period it enhanced its exposure to metal, cement and construction sector stocks.

The fund pruned its holding in the auto sector from 16 per cent to 10 per cent. TVS Srichakra was out of the portfolio completely, while exposure to Amara Raja Batteries was lowered. It instead added TVS Motor to its portfolio.

Software stocks were viewed with caution, with a 2.5 per cent cut in IT holding. Frontline stocks Satyam Computer Services and UTV software moved out and Infosys found its place in the fund.

S.M.I.L.E evinced interest in consumer goods on the back of improved earnings by FMCG companies over the past couple of quarters.

The sector enjoyed maximum allocation of assets. Stocks such as Colgate Palmolive, Hindustan Lever, Emami and ITC were accumulated, while Balrampur Chini and McDowell were added afresh.

In the engineering space, the fund bought stocks of Siemens, ABB and AIA Engineering despite a sharp run-up in prices witnessed over several months.

With the firming up of cement prices stocks such as Chettinad Cement have stayed with the portfolio for nearly a year.

Birla Corporation was also added to this space. Jaiprakash Associates was included into the fund's construction portfolio.

Sundaram S.M.I.L.E fund appears to adopt a buy-and-hold strategy in large-cap stocks such as Reliance, BHEL, Larsen & Toubro, ITC and Emami.

However, more than 60 per cent of the total assets were invested in stocks with a market cap of less than Rs 2,000 crore.

In the energy space it exited stocks such as NTPC and IOC. SAIL and Hindalco were new entrants in the metals space after the stocks witnessed a smart rally during the quarter.

Ucal Fuel Systems, Vivimed Lab, Welspun India, Atul Industries, Canara Bank, Punj Lloyd, Bayer and Dredging Corporation were sold.

Fund facts

Sundaram S.M.I.L.E was launched in February 2005. It aims at capital appreciation by investing primarily in diversified stocks of small and medium enterprises. Mr Anoop Bhaskar manages the fund.

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