The Hindu Business Line : Sundaram BNP Paribas Capex Opportunities: Invest

Investors with a risk appetite can take exposure to Sundaram BNP Paribas Capex Opportunities Fund. The fund invests in sectors and stocks that benefit from capital spending. The investment universe of Capex Opportunities is somewhat wider than that of infrastructure theme funds, which typically focus on stocks that benefit from infrastructure spending alone.

Capital expenditure is on full-swing with sectors such as power and cement running to full capacity. Heavy capex in sectors such as petrochemicals and steel are also under way and the pace of work on roads and bridges continues to be robust. Theme funds such as Capex Opportunities are suitable for investors who already own diversified equity funds and are looking for more focused exposures to sectors in fancy. . Hence investments into sector funds can be considered as a diversifier rather than as part of your core portfolio.

Performance: Sundaram BNP Paribas has returned 53 per cent over the past year and trailed its benchmark BSE Capital Goods Index by 23 percentage points. However, the index may not really be the ideal benchmark; the top five stocks have a 76 per cent weightage of the overall index. The theme appears to have performed better than “infrastructure funds”. In the past year, Capex Opportunities outpaced such peers as DSPML T.I.G.E.R., ICICI Pru Infrastructure and UTI Infrastructure.

Portfolio Overview: The fund has predominantly invests in stocks that are suppliers to manufacturers. This helps it achieve the target return earlier than companies engaged in capacity expansion.

For the past one year, it has predominantly invested in large cap stocks. The fund has a well- diversified portfolio of 56 stocks. More than 60 per cent of the portfolio was invested in the industrial manufacturing sector.

The fund has the flexibility to invest across market capitalisation. With a mandate to invest 30 per cent of its assets in stocks outside infrastructure, it may be less susceptible to infrastructure-specific risks.

Fund facts: Sundaram BNP Paribas Capex Opportunities was launched in September 2005. The fund is managed by Ms Srividhya Rajesh and the assets under management are worth Rs 237 crore. The NAV per unit is Rs 22.18.

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