Sundaram Money is a short-term debt fund launched in March 2001. While investors can invest in the fund with a minimum of Rs 50,000 at NAV, redemption within 5 days carries a load of 0.25%. The fund offers both growth and re-investment options to investors. However, its is one of the very few funds today which does not offer Sunday NAV facility.
The fund seeks to offer income consistent with preservation of capital through investments in short-term fixed income securities. In pursuit of this objective, the fund has almost evenly split its Rs 50 crore portfolio between money market and corporate debt instruments. While holding AAA quality portfolio, the fund has been very nimble with its allocation, rapidly switching across the two instruments.
For instance, in the bear markets of 2000, the fund held its assets in liquid money market instruments seeking returns from the high call rates. However, in the bull-run since late last year, the fund has hiked exposure to corporate instruments to pick up yield. However, the fund has mitigated the risks associated with these instruments by being conservative on portfolio maturity, which averages around 48 days in the last half -year.
Despite its relative conservatism, the fund has returned 9.42% in the last trailing year against a 21- fund category average of 9.21%. Sundaram Money, with a quality portfolio is managed with agility and offers returns commensurate with a liquid portfolio.