Skip to main content

Mutual Fund Review: Sundaram Equity Multiplier

 

New investors seeking a multi-cap investment in mutual funds have other options to choose from and can ignore Sundaram Equity Multiplier

 

A multi-cap offering from Sundaram Asset Management Company, Equity Multiplier has been an average performer so far with returns at par with those of the benchmark indices. While the fund has had a good launch at the beginning of the stunning rally in January 2007, it slipped in performance after that. Its failure to rebound since then has had a cascading impact on its overall ratings till date.

PERFORMANCE:

Despite the volatility in the markets, Sundaram Equity Multiplier has had a good start in 2011. Returning over 3% since January this year, it is poised to outperform the major indices which have registered a fall of more than 5%
during this period. This short term performance, however, fails to make
up for its underperformances during the previous years.


   Equity Multiplier gained the market momentum posting a handsome 79% gain in the very first year — a fine reward for those who took the risk of investing in a new fund offering. This excitement was, however, short-lived as the impact of the global financial meltdown led to the scheme shedding more than 55% of its gains in the very next year. The savage sell-off stocks being uniform, across all equity mutual fund schemes, sectors and indices, investors would have ignored the slippage in the performance of this scheme in 2008. However, the scheme's failure to compensate for the losses during the upswing in the markets in 2009 and then again in 2010 does not seem to have gone down well with investors, as reflected in the consistent decline in its AUM.


   In 2009, for instance, Equity Multiplier returned just about 68% gains against over 88% clocked by its benchmark index — the S&P CNX 500. Its peers, on an average, returned nearly 87% then. Again in 2010, the scheme's performance was quite dismissal as it returned just about 11% against the average of 18% returns by its peers. No wonder, having made just about 42% absolute gains since its launch, Sundaram Equity Multiplier appears to have lost out in terms of investor confidence.

PORTFOLIO:

Unlike most of its peers, who are extremely bullish on the financial and energy sectors, Sundaram Equity Multiplier has placed its bets on the healthcare sector which currently accounts for more than 22% of its equity portfolio.


   A dormant sector once upon a time, healthcare has seen a good run-up since 2009. So much so that equity funds dedicated totally to the healthcare segment have shown a better performance over the past three year period. However, having seen a good run up already, it is anyone's guess as to whether the momentum will continue in the healthcare sector. If it does, then Sundaram Equity Multiplier could be a sure shot beneficiary. While the healthcare is the predominant sector for the fund, the diversification here is restricted to just about four stocks — Cadila Healthcare, Glenmark, Torrent and Biocon. Moreover, its asset under management of about 300 crore is concentrated in just about 24 stocks resulting in a high exposure per stock.

OUR VIEW:

Barring its performance in the current calendar year so far, Sundaram Equity Multiplier does not have much to back it. New investors seeking a multi-cap investment in mutual funds have other options and can ignore Equity Multiplier. However, given the turnaround in its performance over the past few months, existing investors may hold on to their investment, especially if they have invested in the scheme during late 2007– early 2008 when NAV of the scheme had peaked at 18 per unit.

 
 

-----------------------------------------------------------------

 

Also, know how to buy other mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

4) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

5) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

6) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

7) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

Popular posts from this blog

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...
Read more

ICICI Pru Constant Maturity Gilt dividend

Invest ICICI Prudential Constant Maturity Gilt Fund Online ICICI Prudential Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) ICICI Pru Constant Maturity Gilt-DQ 0.26543239 ICICI Pru Constant Maturity Gilt Direct-DQ 0.27171609 ICICI Pru Q Interval Plan I-D 0.10617296 ICICI Pru Q Interval Plan I Direct-D 0.10703967 ICICI Pru Q Interval Plan I Ret-D 0.10617296             The record date has been fixed as June 13, 2016.   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) ...
Read more

NPS Investment Choice for Safe Investors

Invest NPS Online       Whether they invested through SIPs or put in a lump sum amount, risk-averse individ uals have earned the highest returns. These are investors who stayed away from stocks and divided their NPS corpus between G class gilt funds and C class corporate debt funds. On average, gilt funds have given 9.75% annualised returns while corporate debt funds have churned out more than 11% in the past five years. As a result, the average return for ultra-safe investors in the past five years is in double digits. Even in the short term, ultrasafe investors have been the biggest gainers among NPS investors. Will the good times continue? The gilt funds of NPS are holding long-term bonds with an average maturity of over 19 years and a modified duration of about 9 years.These funds have done well because interest rate cuts have pushed down bond yields. But experts say this trend will not stay forever. NPS is a long-term investment and the bonds are predominantly held to matu...
Read more

Buy Health Insurance Plan even if you are covered with my Employer

Buy Health Insurance Plan Online Yes, getting a private insurance cover now, which extends beyond your retirement age, is recommended There are a few reasons why buying a health insurance plan may make sense even though you get medical insurance from your employer. Here are the points you need to think about. Firstly, your employer's insurance coverage will only protect you as long as you are employed with the company. The policy will terminate when you quit the job or when you retire. Post retirement is perhaps the phase when one needs it the most but you won't have it then. Moreover, buying a new insurance policy after the age of 50 means that there will be no coverage for pre-existing diseases.   Lastly, health insurance policy you get from your employer may or may not cover your dependants. ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver M...
Read more

SBI MAGNUM MIDCAP ONLINE

Invest SBI MAGNUM MIDCAP ONLINE   SBI MAGNUM MIDCAP fund didn't fare well in its initial years but, in recent years, has steadily improved its performance under the capable hands of its current fund manager. Although investing predominantly in mid-cap stocks, the average market capitalisation of its portfolio is lower than other category peers.   Although the stock selection approach is mostly bottom-up , the fund manager doesn't shy away from taking bold sector bets , as is reflected in its large exposure to the healthcare sector. She is equally adept at handling performance across market cycles--the fund has captured more of the upside during market upticks and contained the downside during downturns in a better manner than its peers.   Given its superior risk-reward equation, the fund is a worthy pick in its category.     ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing EL...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now