Sundaram Mutual Fund launched a new mutual fund scheme on 27th March 2018 – Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan. It is a close-ended Equity Linked Saving Scheme (ELSS) with a tenure of 10 years from and including the date of allotment. It also has the option of withdrawal after 3 years from the date of allotment.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan scheme pitches for a distinctive portfolio along with income tax benefit under 80C of the Income Tax Act, 1961.

Sundaram Long Term Tax Advantage Fund Series IV – NFO: Facts

Sundaram Mutual Fund is one of the premier mutual funds in India and caters to the investment needs through a suite of mutual fund schemes.

It recently announced the launch of Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO.

NFO NameSundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO
NFO Launch Date27 March 2018
Last Date for Application27 June 2018
Minimum Investment Amount₹500
Fund TypeEquity Linked Saving Scheme (ELSS)
NatureClose-ended fund
Tenure10 years (Option of withdrawal after 3 years from the date of allotment)
Fund ManagerMr. Dwijendra Srivastava and Mr. S Krishna Kumar
BenchmarkS&P BSE 500

How to Invest in Sundaram ELSS  NFO 2018

Log in to your Groww account. If you are a new user, sign up first– it is completely online and takes 2-3 working days. If you want to invest in Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO, you have to follow the steps below.

  1. Decide the amount you would like to invest in Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO.
  2. Email Groww support on support@groww.in with a request or call/Whatsapp on 9108800604.

When investing in this NFO, you must remember, it is a close-ended mutual fund.

Once you invest, you will not be able to touch the money until the lock-in period of 3 years. Also, you, need to invest at least ₹ 500 in it. Invest only if you don’t need the money for that duration.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Objective

The investment objective of the scheme is to generate capital appreciation over a period of ten years by investing predominantly in equity and equity-related instruments of companies along with income tax benefit.

But there is no assurance that the objective of the scheme will be realized and the scheme does not assure or guarantee any returns.

Sundaram Long Term Tax Advantage Fund Direct Plan NFO: Fund Category

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan is categorized as an ELSS fund. ELSS is a category of mutual fund that the government created to encourage long-term investing in equity.

In order to improve equity participation, the government allowed investment in equity based mutual funds to be tax-deductible through ELSS schemes.

An ELSS fund manager invests in a diversified portfolio, predominantly consisting of equity and equity related instruments that carry a high-risk and have the potential to deliver high-returns.

ELSS is a dedicated mutual fund scheme that allows investors to save tax. It also provides an opportunity for long-term capital appreciation.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan is a close ended fund.

Close ended funds are mutual funds that are offered to investors for a limited period only, that is, during the period of New Fund Offer. These funds have a fixed maturity period.

Success of these funds depends on the amount of time invested by fund house in researching and finding the right dark horse stocks in small cap segment and stable stocks among large cap segment.

Read More : 15 Things to Know About ELSS Funds

Sundaram Long Term Tax Advantage Fund: Plans Available

The scheme offers the following plans: Regular Plan and Direct Plan. 

Both the regular and direct versions of any mutual fund are the exact same fund, run by the same fund managers investing in the same stocks, and bonds.

The difference is that in case of direct mutual funds, there is no broker/distributor commission. Which means, as an investor, you get higher returns from the exact same mutual fund.

Read More: Direct vs Regular Mutual Funds Examples: Returns of Top 10 Funds Compared

These Plans further offers the following options:

  • Growth Option
  • Dividend Option

If no option is indicated in the application form the default option will be the Growth Option.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Asset Allocation

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan scheme will contain Equity & Equity related securities from 80% – 100% ( High Risk instruments) and Money Market & Debt instruments between 0 – 20% ( Low to Medium Risk instruments) depending on market scenarios and conditions.

Typically, a closed-end fund works well for long-term wealth creation if your fund manager is able to identify good, small cap companies and is able to buy their shares at attractive prices.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Benchmark

The fund will be bench-marked to S&P BSE 500 index.

The S&P BSE 500 index is designed to be a broad representation of the Indian market. Consisting of the top 500 companies listed at BSE Ltd., the index covers all major industries in the Indian economy.

S&P BSE 500 index represents nearly 93% of the total market capitalization on BSE.

S&P BSE 500 covers all 20 major industries of the economy. In line with other BSE indices, effective August 16, 2005 calculation methodology was shifted to the free-float methodology.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Fund Manager

This fund will be managed by Mr. Dwijendra Srivastava and Mr. S Krishna Kumar. They both have immense experience in the financial markets of India.

Mr. Dwijendra Srivastava 

Education: Mr. Srivastava is B.Tech , PGDM (Finance) and CFA.

Experience: Prior to joining Sundaram Mutual Fund he has worked with JM Financial AMC, Tata AMC Private Ltd., Tower Capital and Securities, Indo Swiss Financial and Gontermann Pipers.

Funds Managed:

Mr. S Krishna Kumar

Education: Mr. Kumar is a B. Tech from National Institute of Technology Trichy, and MBA from LIBA Chennai.

Experience: Prior to joining Sundaram BNP Paribas Mutual Fund he has worked with Anush Shares & Securities.

Funds Managed:

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Minimum Investment

The minimum investment that can be made per investor in this NFO is ₹500 and in multiples of ₹500 thereafter.

However, as per section 80C of the Income Tax Act, 1961, the tax benefit will be available only up to a maximum amount of ₹ 1,50,000 (along with other prescribed investments.)

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Risk

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO 2018 falls in the moderately high-risk category as per the company scheme information document indicating that the principal invested by the investors will be at moderately high risk.

Some of the risks associated with the fund are trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

The fund is an ELSS fund and therefore is of high to medium risk when compared to large-cap funds and debt funds due to their exposure in high performing equities.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: Salient Features

The mutual fund company believes that this theme is a multi-year theme and a strong return generator too, with a power packed team of Mr. Dwijendra Srivastava and Mr. S Krishna Kumar as the fund managers.

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO Scheme have good liquidity and will offer redemption/switchover on every business day at NAV based prices after the lock-in-period of 3 years from the date of allotment.

Read More: All You Need to Know About ELSS funds. 

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO: AMC Details

Sundaram Asset Management Company (Company) has over 20 years of experience in fund management and is a fully owned subsidiary of one of India’s oldest and most respected NBFCs – Sundaram Finance Limited. The Company was jointly promoted by Sundaram Finance Ltd and Stewart Newton Holdings (Mauritius) Ltd in 1996.

Key Reasons to Invest in Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan NFO

Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan is the fund for long-term capital growth and for investors who wants to invest in equity and equity related securities that are likely to benefit from the recovery in the rural economy along with income tax benefit sunder Section 80C of the Income Tax Act, 1961.

Key reasons for choosing this fund are:

Time Horizon : Longer investment horizon raises the probability of higher returns

Lock-in period : Helps you tide over the near term volatility

Positioning : Complements current investor portfolios with a differentiated investment thesis.

Other Options

If you think Sundaram Long Term Tax Advantage Fund Series IV – Direct Plan is too risky for you, you can invest in less risky equity mutual funds like large-cap funds and balanced funds.

But for investing in tax savings funds, here are the best ELSS fund options for 2018 are :

  1. Aditya Birla Sun Life Tax Relief 96
  2. Reliance Tax Saver (ELSS) Fund
  3. IDFC Tax Advantage (ELSS) Fund

Read more about these tax savings funds.

To look at some of the best performing funds from every category of mutual funds, check out Groww 30 best mutual funds to invest in 2018.

Happy Investing!

Disclaimer: the views expressed here are of the author and do not reflect those of Groww.