The Hindu Business Line : Sundaram BNP Paribas Select Midcap<br> Top sectors pruned, software enhanced

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Sundaram BNP Paribas Select Midcap
Top sectors pruned, software enhanced

Sundaram BNP Paribas Select Midcap has been one of the star performers in the mid-cap space for past year. Being one of the few funds to hold cash close to 35 per cent just before the May correction has helped the fund retain most of its gains from bull rally.

The fund invests in mid-caps, which it defines as a stock whose market cap does not exceed that of the lowest market cap stock in the CNX Nifty or the highest in the CNX Midcap. A portfolio reshuffle was made during the critical period of June-August 2006.

Select Midcap has very large basket of 105 stocks. The top three sectors account for 33 per cent of the assets.

The fund pruned the top four sectors — industrial manufacturing, consumer goods, construction and automobiles. Exposure to cement, financial services, metals, textiles and software sectors were enhanced.

In the manufacturing space, the fund pruned a host of stocks, including Thermax, Lakshmi Machine, Kalpataru Power, ABG Shipyard and AIA Engineering. The fund added Bharat Electronics, Graphite India and Jain Irrigation. Exposure to South East Asian Marine, BEML, McNally Bharat and Atlas Copco was increased.

Consumer goods stocks such as Voltas and Tata Tea were trimmed. Exposure to Samtel Colour almost doubled. Shoppers Stop, Trent and Balrampur Chini were added to the portfolio.

The construction exposure, which helped the fund-house achieve higher returns, has fallen sharply. Exposure to Unitech, the stock that had a dream run, was pared along with Hindustan Construction and Gammon India. The fund also added Jaiprakash Associates and Simplex Concrete Piles. IVRCL Infrastructure and Mahindra Gesco moved out of the portfolio completely.

The automobile sector also underwent a minor re-jig. Exposure to Ashok Leyland and Pricol was reduced, while that to Sundaram Clayton, MRF, Eicher Motors and Automotive Axles was stepped up. Kesoram Industries was the lone stock to enter the portfolio.

The portfolio's financial services exposure almost doubled, with Bank of Baroda and Bank of India added afresh. India Infoline was also enhanced.

Software stocks have attracted the attention of most fund-houses. Select Midcap, however, has only marginally increased the exposure to this segment and it corners 2.3 per cent of the net assets.

Fund Facts: Select Midcap was launched in July 2002.The asset is managed by Mr Anoop Bhaskar. The asset size is Rs 1,010 crore.

Suresh Parthasarathy

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