101853  |  INF903J01538  |  4 star  |  Neutral

NAV

$ 96.65

1-Day Total Return

-0.98
%
INR | NAV as of 6/23/2017 9:30:00 AM | 1-Day Return as of 23 Jun 2017

TTM Yield

0.00%

Load

Multiple

Total Assets

17.0 bil

Expenses

2.61%

Fee Level

--

Turnover

54%

Status

Open

Min. Inv.

500

30-Day SEC Yield

--

Category

ELSS (Tax Savings)

Investment Style

Large Growth
Author
Morningstar's Take | 05/04/2017
by Kavitha Krishnan

Despite the presence of an experienced and capable manager at the helm, we’d like to see the investment team stabilise before we build more conviction on the fund.

S. Krishnakumar is the CIO of equities at Sundaram and is a capable fund manager with over 20 years of experience in portfolio management, 13 years of which has been with Sundaram. He is a mid-cap specialist and is responsible for managing the fund house’s small/mid-cap strategies. He is a skilled manager in our opinion and his long tenure and experience at Sundaram are a positive.

Although the investment team is quite experienced, they recently underwent a restructuring process, with managers being assigned roles that reflect their areas of strength. While Rahul Baijal manages the AMC’s large-cap strategies, Shiv Chanani now manages flexi-cap strategies and Krishnakumar manages the fund's small- and mid-cap mandates in addition to his role as the CIO of equities. We think that the restructuring will yield positive results over the long term. However, we would like to evaluate the impact of these changes over a longer term before we build more conviction on the team.

The fund’s investment strategy has remained flexible, moving across market capitalisations. Its current exposure to mid-cap stocks in the portfolio ranges between 35% and 40%. However, this can change significantly based on its investment avenues. The fund is currently run with a slightly concentrated approach at a sector level with the manager deviating significantly from the index weightings.

This strategy has its own share of risks, and wrong sector calls by the fund manager can lead to substantial underperformance compared with its peers. While we have a positive view on the manager, we want to adapt a wait-and-watch approach until the team stabilises.

Morningstar Analyst Rating™
Analyst Rating
Portfolio Role

A multicap strategy that can tend to vary its exposure across market caps.

People

A capable leader at the helm, yet the recent internal restructuring restricts our conviction level.

Parent

The AMC has been working towards making positive changes.

Process

A well-defined process aimed at constructing a growth-oriented portfolio of high-conviction ideas.

Performance

The fund performed has posted positive returns under Krishnakumar’s leadership.

Price

The fund’s price is higher than that of a typical peer in the India ELSS category.

Important Disclosures

Unless stated otherwise, this report was prepared by the person(s) noted in their capacity as Manager Research Analysts (i.e., fund analysts) employed by Morningstar, Inc., or one of its affiliates. It has not been made available to the issuer prior to publication.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Manager Research Analysts’ expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness.

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