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Sundaram Mutual Fund plans to mop up ₹300-400 crore through launch of Sundaram Service Fund, its first open-ended equity offer in eight years.
All along, the fund house which manages ₹37,000 crore of assets, has believed in raising funds through theme-based close-ended schemes with tenure of about five years. It has 30 close-ended schemes with assets under management (AUM) of ₹4,000 crore.
Sunil Subramaniam, Managing Director, Sundaram Mutual, said the fund house was focussing on close-ended schemes as it believed investors should stay invested in a theme-based equity fund for long to mitigate risk and reap the full benefit. “Over a period of time, we thought investors should be given an option to exit. The multi-cap Sundaram Service Fund has been designed to deliver the best returns with maximum protection through diversification into 15 service sectors,” he said.
Moreover, he added SEBI has restricted the approval for launching close-ended schemes and is expected to come out with new regulations on it soon.
The NFO will be open for subscription till September 12 and will reopen for further subscription and redemption from September 26.
On his conservative response for NFO, Subramaniam said in recent times bank-sponsored fund houses have managed to attract about ₹2,000 crore through the NFO but 80 per cent of it is routed through their proprietary channel cross-selling.
The new fund of Sundaram Mutual will invest in service sectors such as transportation and logistics, healthcare, retail, media and entertainment, hospitality and tourism, financial services, fitness, education, staffing, wealth management and aviation.
These sectors represent 54 per cent of the Indian economy but account for only 35 per cent of overall market capitalisation, implying huge potential for future growth, he said.
Sundaram will initially build a portfolio of 40 stocks from its select list of 200 multi-cap stocks with ₹40-lakh crore market capitalisation.
It will also explore investment opportunities in new-age services which have the potential to list on exchanges over a period of time.
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