The Hindu Business Line : Sundaram BNP Paribas Growth: Hold

Investors in Sundaram BNP Paribas Growth can retain their units. The fund comfortably outpaced its benchmark BSE-200 over three- and five-year periods, though its performance has flagged over the last seven months despite its large-cap bias. HSBC Equity, which sports a similar portfolio, however, posted positive returns for the past six months.

Several funds from the Sundaram Mutual house preferred to hold cash during the market pull-back in July, staying away from the rally. This appears to be the reason for Sundaram Growth's lacklustre performance too.

Despite its mandate to invest across market cap segments, the fund has preferred low exposures in mid- and small-cap stocks and instead holds more large-caps. This strategy may be well-suited for investors with a low-risk appetite.

Performance: Sundaram Growth Fund generated a return of 58 per cent and outpaced its benchmark by four percentage points. The returns are comparable to peers such as Franklin India Blue chip and HDFC Top 200. Over the past 24 months the fund has outpaced the benchmark by 12 occasions on a rolling return basis.

Portfolio Profile: The fund had a well-diversified portfolio of 65 stocks as of October 2006. The top ten stocks accounted for 36 per cent of the assets. Exposure to a single stock was restricted to less than 5 per cent of the total asset value. Even during the mid-cap rally last year, exposure to mid-caps with a market cap of less than Rs 2,500 crore constituted only about 10 per cent of the portfolio size. This reflects the fund's conservative approach.

The fund appears to churn its portfolio actively and has a strategy of profit-booking at regular intervals in large-caps.

However, select stocks such as Infosys, Reliance Industries, HDFC and State Bank of India have been in the portfolio for close to year now. Most of the mid-cap stocks have not stayed in the portfolio for over six months. Banks, engineering and cement are the top three sector holdings.

The NAV per unit is Rs.64.3.

More Stories on : Mutual Funds | Recommendation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page