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Sundaram Mutual has launched a new open-ended equity scheme, Sundaram Balanced Advantage Fund. The New Fund Offer of the dynamic asset allocation fund will open for subscription on Friday and close on February 28. The scheme will reopen for ongoing subscription and redemption from March 12.
The scheme aims to provide accrual income and capital appreciation by dynamically managing the asset allocation across equity, fixed income, REITs/InvITs and equity derivatives.
Depending on prevailing market and economic conditions, the fund manager will decide asset allocation across asset classes, without giving up tax-efficiency. The fund’s investment strategy is to build a multi-cap portfolio, making allocation based on valuation differentials in P/E (price-to-earnings ratio) across cap curves and sectors, with a high- quality diversified fixed income portfolio focused on generating accrual income.
The stock selection would be based on bottom-up in-house research.
Sunil Subramaniam, Managing Director, Sundaram Mutual, said though equity is the best asset class to build wealth, it comes with volatility. To offset this, a portion of the portfolio is invested in fixed income at the cost of returns.
Striking the right balance
However, Sundaram Balanced Advantage Fund aims to strike the right balance between risk and reward, with flexible allocation across asset classes to deliver superior risk-adjusted returns over the long-term.
S Krishnakumar, CIO (Equity), Sundaram Mutual, said the product not only suits first-time investors who are not cut out for huge volatility in equity market but also investors looking for portfolio diversification.
The recent coronavirus outbreak in China may have pushed domestic economic recovery from the first half of next fiscal to December quarter, but it has opened up huge export opportunity for Indian companies, he said.
Highlighting the good reception given to the NFO launched by Sundaram Mutual, Subramaniam said the recently launched multi-cap fund had collected ₹350 crore in NFO and added another ₹200 crore ever since to become the flagship scheme of the fund house. Similarly, the services fund had delivered over 30 per cent return in last one year, he added.
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