Sundaram Mutual Fund opened subscriptions for NFO (New Fund Offer) for Sundaram Long Term Tax Advantage Fund – Series – IV – Direct Plan (G) on 27th March 2018.
Here is what you need to know about this fund.
The objective of this mutual fund is to invest mainly in equity and equity-related instruments of companies, with an income tax benefit. This scheme aims to generate capital appreciation over a period of ten years as its investment objective. However, there can be no guarantee that the investment objective will be achieved primarily due to market risks.
| NFO Period: | 27th March, 2018 – 27th June, 2018 |
| Fund Managers: | Mr. Dwijendra Srivastava and S Krishna Kumar |
| Benchmark: | S & P BSE 500 |
| Tenure: | 3650 days (10 years) |
Sundaram LT Tax Advantage Options
Under this scheme, there are two options, which are growth and dividend payout:
The portfolio remains the same for both the options. The NAV would be different and declared differently.
If you want to invest in this NFO, the following steps must be followed.
The scheme has been set up as an ELSS (Equity Linked Savings Scheme) thus has a lock-in period of three years to avail taxation benefits. It is a 10 year close ended fund which gives fund managers the flexibility to execute the investment strategy very effectively over the tenure of the scheme.
The managers after careful evaluation of the macroeconomics and business environments analyze the efficiency of the company operations and its management to scale up the business promoting growth for profitability. Both relative and comparative valuations may be done by the managers for studying the stocks.
The fund can invest a minimum of 80% and a maximum of 100%, in equity and other related instruments. Also, a maximum investment of 20% may be done in others (excluding debt instruments).
Steps are usually taken to ensure maximum return to the shareholders along with tax benefits and it is done in accordance with the guidelines of SEBI for investment particulars.
The benchmark of this scheme is S&P BSE 500 Index.
It is consisted as the top 500 companies listed on BSE Limited and represents all the major industries in the Indian economy.
The main competitors of the scheme currently in the market are:
The fund managers of the scheme are Dwijendra Srivastava and S Krishna Kumar.
Mr. Dwijendra Srivastava is the Chief Investment Officer (CIO) of Debt at Sundaram Asset Management Company. Prior to this, he was Head – Fixed Income at Deutsche Asset Management (India) Limited.
He has an extensive investment experience and also holds a CFA degree. Mr Srivastava has obtained PGDM in Finance from Goa Institute of Management and B.Tech degree in textile technology from M.D University, India. Some of the funds co-managed by him are:
S Krishna Kumar is the Chief Investment Officer of Equity and Vice President at Sundaram Asset Management Company Limited. Prior to this, he was the head at equity in Sundaram.
He worked at Lucas TVS for six years as a senior engineer and has obtained a PGDBA in Finance and Portfolio Management form Loyola Institute of Business Administration and a B.E.(hons) degree from the National Institute of Technology, Tiruchirappalli.
Some of the funds co-managed by him are:
There are general risk factors associated with the scheme like exposure to market risk. Changes in government policies and impact of the economic conditions can also bear a substantial risk to the scheme.
At times, there can be a liquidity risk which may result for it to become incondusive, as it is a close-ended fund.
However, diversification, complying with the rules and regulations and other risk mitigating measures would be actively employed by the fund managers.
The entire paid-up capital of Sundaram Asset Management is being held by Sundaram Finance Limited (SFL).
SFL is one of the largest non-banking financial companies in India with a national presence across multiple facets of the financial service industry including vehicle finance, home finance, mutual fund, general insurance and financial service distribution.
Sundaram Asset Management offers a range of products in equity, fixed-income and liquid funds spaces that cater to a range of risk, return and liquidity preferences of investors.
A strong research team, along with a robust process forms the backbone of its fund management team, which has an enviable track record in identifying “tomorrow’s winners” in the mid and small cap segment. For fixed-income funds, emphasis is laid the credit quality of the portfolio.
| Mutual Fund | Sundaram Mutual Fund |
| Setup Date | Aug-24-1996 |
| Incorporation Date | Feb-26-1996 |
| Sponsor | Sundaram Finance Limited |
| Trustee | Sundaram Trustee Company Ltd |
| Chairman | Mr. Pratip Chaudhuri |
| CEO / MD | Mr. Sunil Subramaniam / Mr. Harsha Viji |
| CIO | Mr. Dwijendra Srivastava / Mr. S Krishnakumar |
| Compliance Officer | Mr. P Sundararajan |
| Investor Service Officer | Mr. S Ravi |
| Assets Managed | Rs. 34306.30 crore (Mar-31-2018) |
The scheme aims to provide a long-term appreciation of capital, along with tax benefits to its investors. Investors must invest in the fund if they have little knowledge of the markets and if they want to be free from evaluating each stock of the S&P BSE 500 Index.
Since this is a close-ended scheme that aims for capital appreciation, the investors should refrain from it if they want immediate money or liquidity.
Happy investing!
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.