Best Sundaram Equity Mutual Funds

Sundaram Asset Management Company is one of the renowned AMCs in India and a subsidiary of Sundaram Finance Limited (SFL). Since its establishment in 1996, it has managed assets worth Rs.41,613 crore. 

This fund house offers more than 55 schemes under its portfolio, including the best Sundaram equity mutual funds. Among these schemes, approximately 25 are direct, and the rest are regular plans. 

An equity mutual fund primarily invests in stocks. The fund managers spread this investment across sectors and companies with different market capitalisations to generate high returns. However, as these funds depend on market conditions, they are prone to substantial risks. 

Furthermore, there are several types of equity funds. Based on investment style, they are categorised into active and passive funds. In active funds, portfolio managers choose the stocks to invest in. Passive funds generally track a market index to determine the list of stocks to be included in their portfolio. A fund manager plays no active role in this type of equity MF. 

Other than this, equity funds are classified based on tax treatment into Equity Linked Savings Schemes (ELSS) and Non-taxing Saving Equity Funds. In addition to this, there is categorisation concerning market capitalisation like large-cap, mid-cap, small-cap, and multi-cap funds. 

One of the biggest advantages of equity mutual funds is that they offer the most substantial returns than other mutual funds. Additionally, these funds provide diversification as your investment is spread across different sectors. Some other benefits of these funds include flexibility and liquidity. 

However, the advantages and disadvantages of these mutual funds vary depending on the type of scheme you choose for. The best Sundaram equity mutual funds 2023 houses roughly 13 schemes classified based on the underlying companies’ market cap, investment style, tax treatment, etc. 

Taxability

Before investing in the best Sundaram equity MFs, it’s necessary to be familiar with their taxability: 

Long-term Capital Gains Tax: When you sell units of your equity mutual fund after a holding period of 12 months or more, gains on it will attract an LTCG tax. The tax levied is around 10% without indexation benefit. However, if the amount is below Rs.1 lakh, your gains will be tax-exempted. 

Short-term Capital Gains Tax: In case you redeem the units of the best Sundaram equity mutual funds within a year of investment, you are liable to pay an STCGT on the capital gains. Irrespective of your income tax bracket, you will need to pay tax at the rate of 15%. 

TDS: Investors need to incur a 10% TDS on dividends above Rs.5000. 

On ELSS: One can claim tax exemption on investments up to Rs.1.5 lakh in an ELSS scheme. It’s available under Section 80C. 

Factors to Consider Before Investing

One should keep a tab on some factors vital to shortlist the best Sundaram equity mutual fund. 

Risk appetite: Market fluctuations affect equity mutual funds that make them a high-risk instrument. Therefore, it is crucial to assess your risk-intake capacity before going for this type of fund. 

Investment intent: It may be helpful to evaluate the objectives of different schemes. That way, one can shortlist schemes based on whether they are compatible with their intent of investment. 

Holding analysis: Holding analysis gives an insight into where your resources are invested. This enables you to estimate the ROI and account for losses before and during the period of investment.  

Fund performance: The track record of a scheme shows how it performed under various market trends. This is vital to consider before investing in the best Sundaram equity mutual funds. However, it is important to note that a fund’s past performance is not an indicator of the probable returns. 

Fund manager’s experience: An experienced fund manager will know where to allocate your resources to generate expected returns. Therefore, reviewing a fund manager’s expertise before investing in a scheme can be beneficial as it directly affects your gains. 

Expense ratio: Equity mutual funds charge a certain amount for their administration and management as an expense ratio. They will deduct this fee from the returns. 

Exit load: Investors may need to pay a certain exit load if they wish to liquidate their holdings before a specific period. However, not all schemes levy this charge on exiting partially or fully. Therefore, proper research and consideration are crucial regarding this if you plan to invest in the best Sundaram equity mutual funds. 

Choosing an appropriate scheme to invest in can be challenging, especially for a beginner. However, considering the above-mentioned points and some basic details on equity mutual funds can streamline the procedure.