Markets

Sundaram Mutual’s multi-cap NFO opens on Friday

Our Bureau Mumbai | Updated on August 13, 2019 Published on August 13, 2019

Sundaram Mutual Fund is all set to launch a new fund offer — a multi-cap open-ended equity scheme — Sundaram Equity Fund. The scheme will be open for subscription between August 16 and 30. It will reopen for ongoing subscription and redemption from September 16.

The minimum investment during the NFO period is ₹100. An exit load of 1 per cent will be charged if an investor exits within one year.

Diversified portfolio

Sunil Subramaniam, Managing Director, Sundaram Mutual, said the objective of the scheme is to generate capital appreciation by investing in a diversified portfolio of equity and equity-related instruments across market capitalisations.

The fund will invest in a portfolio of 45-50 stocks in consumption and financial services, cyclical recovery themes and emerging business segments.

It has been proved across market cycles that outsized winners have come from across size of companies. Multi-caps provide the flexibility to be with the best ideas within cap curves, he said.

S Krishnakumar, CIO — Equity, and fund manager of the scheme said that with about 20 per cent fall in overall market valuation in the last few months, it is the right time for investors to look at a multi-cap fund.

The performance of the scheme will be benchmarked against S&P BSE 500 TRI index.

Sundaram Asset Management Company has assets under management (AUM) of about ₹33,572 crore as on July 31 with over 11 lakh active investors, 50,000 empanelled IFAs and 93 branches.

 

Dwelling on the enabling resolution for side-pocketing in the credit risk fund approved by the board, Subramaniam said the fund has an exposure of ₹40 crore to DHFL debt paper and it is due for repayment on August 30.

Considering that DHFL has announced its inability to honour the repayment, the fund house considers side-pocketing the best option to protect the interests of existing investors, he said.

Writing down the value of the investment would lead to lower net asset value of the scheme and provide an opportunity for ‘vulture investors’ to step in. These kind of investors typically take positions after the NAV is marked down and benefit when the actual recovery happens, he said.

Published on August 13, 2019
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