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Sun F&C Value Fund

After being through almost a full market cycle today, Sun F&C looks well positioned to benefit from a rising market for its diversity and growth focus.

Sun F&C Value Fund, the only no-load equity fund today, buys growth stocks at a reasonable price. This being the core strategy, the fund emphasizes P/E-to-growth of a stock, besides management quality, sustainability of the business model, quality of earnings and price. And the fund also follows a disciplined entry and exit model with a target exit price for each position in its portfolio.

In recent years with the punctured growth of the technology stocks, Sun F&C Value witnessed a sustained fall from its height two years ago. It fell 17 per cent in the past 2 years and 19 per cent over the past 1-year, through December 6, 2001.

But the fund was very impressive in a growth lead market, given its portfolio strategy. Through the growth led markets of 1999, it gained 129 per cent against 70 per cent rise in Nifty.

Launched in a dull market, the fund drifted in its initial years only to take rapid strides in a rising market in 1999. The fund's portfolio was positioned to benefit from the selectivity of the market rise with large positions in technology, FMCG and health care stocks. This helped it post huge performance numbers, leaving the benchmarks far behind.

However, in the last lag of the rally, the fund acquired pricey small and mid-cap tech offerings. This took its toll on the portfolio quality and steep losses for the year 2000. And the fund struggled to weed out the likes of Shree Ram Multitech, Compudyne Infosystems and Mascon Global.

In recent months, the fund's portfolio reflects diversity with dominance of large cap holdings. These mainly include prominent names in consumer, diversified, cyclical and technology sector. Currently, the weighted average P/E of the fund's portfolio is 18. The market's preference for defensives and the recent gains in technology stocks, has helped Sun F&C Value post a 12 per cent gain over the past three months, through December 6,2001.

Sun F&C Value Fund after being through almost a full market cycle today, looks well positioned to benefit from a rising market for its diversity and growth focus. And being a no-load fund adds to the attractiveness.