Sundaram Asset Management Company is one of the major players in the mutual fund space with assets under management (AUM) of about Rs 36,657 crore as at the end of August 31, 2020.
On Wednesday, it announced the launch of its newly open-ended equity scheme, Sundaram Bluechip Fund. The new fund offer (NFO) opens for subscription on September 17, 2020, and closes on September 30, 2020. The scheme will reopen for subscription and redemption from October 14, 2020. This fund falls under the large-cap category as per the SEBI categorisation.
Objective: It is an open-ended equity scheme that would invest in large-cap stocks. The primary objective of the scheme is to generate capital appreciation by investing in large-cap stocks. The top 100 companies by market cap are categorised as a large-cap company.
Strategy: The investment strategy of the fund would be to build a large-cap portfolio with the maximum contribution of mid-cap stocks at 20 per cent. The portfolio and stocks for the fund would be selected on the basis of three different parameters.
Firstly, the fund will not be a concentrated one and will be well-diversified having 45-50 stocks without being sector biased. Secondly, both growth and value stocks will find a place in the portfolio; however, growth will be given more weightage as India is a developing economy. Value stocks will help to smoothen the volatility as there will be a situation when the value stocks are likely to do better in the journey. Last but not the least, the fund will look at the quality of stocks at three levels. First is the quality of management; second, quality of business, and third would be the quality of financials. Besides, portfolio construction will be a blend of bottom-up stock picking with top-down selection based on the sectoral and macro trends.
Fund Manager: The scheme will be collectively managed by S. Krishnakumar, CIO - Equity, as well as the senior fund manager, Rahul Baijal. The performance of the scheme will be benchmarked against Nifty 100 TRI Index.