Sundaram Growth is a diversified equity fund launched in March 1997. Entry into the fund is at a load of 2 per cent for investments up to Rs 25 lakh while it is lower at 1.75 per cent for investments beyond Rs 25 lakh. The fund has so far paid two dividends in 1999 and 2000, aggregating to 50 per cent.
Sundaram Growth is one of the few funds, which maintained a diversified flavour amidst the tech bull-run and emerged relatively unscathed when the markets plummeted. With its disciplined investment strategy, the fund aims at negotiating pitfalls rather than achieving phenomenal returns. Further, the fund manager follows a long-term approach to investing with an investment horizon of 18-24 months. Here, the fund strictly adheres to its limits on stocks with individual exposure capped at 8 per cent. While steering clear of momentum plays, the fund has focussed on large cap liquid stocks. The sectoral allocation for Sundaram Growth is also well spread-out - while the fund has top investment in technology at 12 per cent, it also has a clear tilt for cyclical sectors.
With its investment philosophy well in place, the fund delivered a sober return of 108 per cent in calendar 1999 and outperformed the benchmark. While this pales in comparison to its aggressive peers, the prudent diversification came in handy when the fund shed only 21 per cent last year, thus outperforming most other diversified equity funds. In the current calendar, the fund has stepped up its cash holding in an uncertain market.
While Sundaram Growth has fared better in a turbulent scenario, its three-year return is not too inspiring at 12 per cent. While the fund's asset base has remained stagnant at around Rs 25 crore since late 1999, the small corpus is spread across as many as 41 stocks and lead to multiple marginal holdings.
Sundaram Growth has been a quintessentially conservative fund and has kept away from taking large sectoral and stock specific bets. While the fund may not rake in astronomical returns, it is also unlikely to leave investors out of pocket with its focus on quality stocks. Opt for the fund if you are aiming at middle of the road strategy that offers sober yet steady returns.