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Sundaram BNP Paribas Energy Opportunities

Sundaram BNP has launched a new fund - Sundaram BNP Paribas Energy Opportunities. It is a three year closed-end equity fund. The fund will invest in shares of energy and energy related companies. It will automatically be converted into an open ended fund after three years from the date of allotment.

The scheme may invest in stocks of companies that fall into any of the following categories:
Producers of energy
Contractors for oil & gas
Suppliers of equipment and materials for creation of necessary infrastructure for production, distribution and consumption of energy
Providers of services for creation of necessary infrastructure for production, distribution and consumption of energy
Distributors of energy in various forms
Manufacturers who may benefit from expanded availability of energy at competitive prices End users of power
Players who benefit from likely changes such as usage of gas by homes and usage of energy from alternative sources and any changes that may emerge due to enhanced availability of energy
Producers of energy from alternative sources
Other beneficiaries from the energy theme who may come to the forefront in the years ahead
Scheme Details Issue Opens: November 12, 2007
Issue Closes: December 11, 2007
Fund Category: Closed-end, Equity Scheme
Benchmark Index: BSE Oil and Gas Index
Minimum Investment: Rs 5000
Entry Load: Nil
Exit Load: Nil. However, redemption will be permitted after deduction of unamortized initial issue expenses
Cost: Initial issue expenses, not exceeding 6 per cent of the corpus collected, would be amortized on a daily basis over the three-year close-ended tenure of the scheme

About the Fund Manager
S. Krishnakumar is the designated fund manager. He earlier worked as head of research at Anush Shares & Securities and a Product Development Engineer for six years at Lucas TVS.

Currently, he is managing two equity funds at Sundaram BNP Paribas Mutual Fund- Sundaram BNP Paribas S.M.I.L.E. and Sundaram BNP Paribas Taxsaver '98, and the two capital protection oriented schemes. During his tenure, these funds have performed quite well.

Fund  From  To  Return  Rank/Count
Sundaram BNP Taxsaver '98 Oct-06 Till Date 41.60 2/6
Sundaram BNP S.M.I.L.E.-G Feb-06 Till Date 42.35 48/138
Sundaram BNP Capital Protection Oriented I 3Y Jul-07 Till Date 7.45 9/24
Sundaram BNP Capital Protection Oriented I 5Y Jul-07 Till Date 8.46 3/24

About Sundaram BNP Paribas Mutual Fund
Sundaram BNP Paribas Mutual Fund was incorporated in the year 1996. Currently it has assets worth Rs.12,482 crore under management, a bulk of which is contributed by its equity funds.

The fund house's 13 equity fund offerings contribute over Rs 7,000 crore to its total assets under management. Most of these are less than three year old and hence not yet rated. However, its older equity funds have a good performance record. Out of its five rated equity funds, one is rated 3-star, three are rated 4-star, while Sundaram BNP Paribas Select Midcap enjoys a 5-star rating.

Overall, the fund house comes across as a formidable player in the domain of equity funds.

Fund  Launch Date  3 Months  6 Months  1 Years  3 Years
Sundaram BNP Paribas Growth Mar-97 43.19 56.49 61.91 52.83
Sundaram BNP Paribas Select Focus Jul-02 52.44 65.26 73.32 60.08
Sundaram BNP Paribas Select Midcap Jul-02 29.21 39.71 43.35 61.39
Sundaram BNP Paribas India Leadership Jun-04 42.85 54.31 56.57 56.60
Sundaram BNP Paribas S.M.I.L.E. Jan-05 46.86 65.55 65.20 -
Sundaram BNP Paribas CAPEX Opp.-G Sep-05 48.75 80.59 87.54 -
Sundaram BNP Paribas CAPEX Opp.-D Sep-05 50.28 81.83 87.72 -
Sundaram BNP Paribas Rural India Apr-06 42.74 56.65 55.56 -
Sundaram BNP Paribas Select Small Cap Jan-07 17.67 25.23 - -
Sundaram BNP Paribas Equity Multiplier Jan-07 50.98 63.48 - -
Sundaram BNP Paribas Taxsaver '98 Mar-98 35.68 46.27 48.26 42.62
Sundaram BNP Paribas Taxsaver Nov-99 41.99 52.58 60.77 56.55
Sundaram BNP Paribas Global Advantage Jul-07 - - - -

Performance of Similar Funds
Currently there are only two funds focussing only upon the energy/ power sector. Of these, Reliance Diversified Power Sector Fund stands out in terms of performance, with phenomenal returns of over 128 per cent in the last one year period.

Fund  Launch Date  6 Months  1 Year  3 Years
Reliance Diversified Power Sector Apr-04 94.52 128.26 88.70
UTI Energy Jun-99 29.24 39.76 27.95
A sector fund is a vehicle of targeted diversification. So it should anyway be only a small part of an equity portfolio. There are two existing open-end funds with similar objective. Avoid this fund for its cost and availability of a superior alternative.