Sundaram Mutual to launch more NFOs targeting individual investors

Sundaram Mutual will launch a series of equity new fund offerings targeting the retail investor and will double its network to tap small towns and cities, according to Harsha Viji, Managing Director, Sundaram Mutual.

In an interaction with Business Line , he said, the company is “back on the offensive” as it prepares to launch at least six NFOs in the coming months. The asset management company with 50 branches now plans to double its network in the next one year, particularly in the non-metros.

Sundaram Mutual has adopted this aggressive approach in a tough market situation. It has decided against sector-specific funds. For example, its pharmaceutical sector specific fund has outperformed the sector benchmark by 34 per cent. But it is unclear if such returns will continue though it remains positive on the sector, Viji said.

Its new offerings will be different, such as the Top 100 under the Rajiv Gandhi Equity Savings Scheme (RGESS), which give double tax advantage for first-time investors. The micro-cap fund launched last December is now in its fourth series with funds being invested in MNCs.

It will tap its core strength in the individual investor segment, Viji said. It has ₹18,000 crore assets under management (AUM) and ₹10,000 crore from retail investors. The average ticket size in equity funds is small at about ₹10,000 and independent financial advisers account for half of the assets under equity.

It has over 15 lakh investor folios and about 40 lakh investor records.

“This is where our strength is and we will continue to focus on this segment,” Viji said.

But Sundaram Mutual’s link with the corporate investor segment will continue. It has large investors that include the biggest companies in petroleum, banking, insurance, energy and auto sectors, he said.

The current year has been mixed but “we are happy with the performance. On the equity side we lost money, as has the whole industry, with AUM down to ₹5,000 crore as compared with ₹7,000 crore at the start of the year.

“But we maintained our market share. We have done very well on the fixed income side and our AUM has doubled to ₹12,000 crore,” he said.