The Hindu Business Line : Sundaram BNP Paribas Rural India Fund

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Sundaram BNP Paribas Rural India Fund — Manufacturing still on top

Suresh Parthasarathy

The bullish stock market of the past three years has seen the launch of several innovative theme-based funds. Sundaram BNP Paribas Mutual Fund launched Sundaram BNP Paribas Rural India Fund last April. As its name suggests, the fund's investment objective is to generate long-term returns by investing predominantly in equity and equity-related instruments of companies focussing on rural India.

However, the fund's investment universe actually cuts a wide swathe across sectors and businesses that benefit from the growth of rural India. The fund discloses its exposures to rural and non-rural oriented companies separately. In the latest portfolio, 24 per cent of the assets were invested in the stocks from the "non-rural" category.

The fund has a well-diversified portfolio of 79 stocks, with exposure to any single stock restricted to 6 per cent. Between February and April 2007 the fund's asset size declined 14 per cent to Rs 823 crore. It made the following changes made in the portfolio during this period.

Industrial manufacturing stayed the preferred choice, its weight in the portfolio moving up. The fund pruned exposure to Crompton Greaves, Greaves Cotton, KEC International, and Voltas. ABB was the new entrant.

The financial services exposure underwent a re-jig; the fund sold the shares of ICICI Bank, M&M Financial Services and Punjab National Bank, while Union Bank of India moved out. Instead, the fund added shares of SBI to the existing holdings. HDFC Bank was another new entrant.

The energy sector's weight in the portfolio moved up substantially and the exposure to frontline stock Reliance Industries was enhanced. ONGC and Tata Power were added afresh, while HPCL and BPCL were retained without change in the holdings. The fertiliser space underwent minor re-jig with increased exposure to Chambal Fertiliser, Gujarat State Fertilisers and Chemicals and United Phosphorous, and pruned in Tata Chemicals.

Bharti Airtel and Reliance Communication represented the telecom choices and the fund reduced its holdings in both the stocks. The fund pared exposure to Satyam Computer, TCS, Tech Mahindra and Prithivi Information Solutions. While exposure to MphasiS was stepped up, Infosys was the new addition. The automobile sector, as a whole, saw a reduction in weightages, with Ashok Leyland, Mahindra and Mahindra and Tata Motors trimmed. Four-wheeler major Maruti Udyog was added afresh.

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