Skip to main content

Sundaram Select Midcap Fund Best Midcap Fund

Sundaram Select Midcap Fund Invest Online
  
 
Mid and Small Cap Funds article in Advisorkhoj - Sundaram Select Midcap Fund is One of the best midcap funds in the last 10 years
Picture courtesy - GraphicStock

The last one year has been very good for midcap funds. Midcap funds have given generated significantly superior returns relative to large cap funds over the last one to three year period, as can be seen in the chart below (NAVs as on May 07, 2015).

Mid and Small Cap Funds - Comparison of annualized return between midcap and large cap funds over the last 10 years

Last year we had reviewed the strong long term track record of Sundaram Select Midcap fund. The fund has continued its strong performance generating nearly 54% trailing returns over the last months. This is purely a mid-cap fund and has achieved capital appreciations through active re-balancing of sectors and stocks, to deliver excellent long term returns on investment. Sundaram Select Midcap fund has strong track record of outperformance. It is best performing midcap fund, along with Birla Sun Life MNC fund, in terms of ten years trailing returns. See the chart below, for the comparison of annualized returns over one, three, five and ten year periods, between Sundaram Select Midcap fund, mid-cap funds category and the CNX Mid Cap Index (NAVs as on May 7)

Mid and Small Cap Funds - Comparison of annualized returns over one, three, five and ten year periods, between Sundaram Select Midcap, mid-cap funds category and the CNX Mid Cap Index

Sundaram Select Midcap Fund – Fund Overview

This fund is suitable for investors with high risk appetites, looking for high capital appreciation over a long term. As such the fund is suitable for investors planning for long term financial objectives. However, investors should be prepared for high volatilities in the short term. Launched in 2002, the Sundaram Select Midcap fund has an AUM base of over 2,900 crores with an expense ratio of 2.3%. The asset management company Sundaram AMC, incorporated in 1996, is a fully owned subsidiary of Sundaram Finance, one of the oldest NBFC's in India. As an AMC, Sundaram specializes in small and midcap funds. From 2007 to 2012 the fund was under the stewardship of Satish Ramanathan, one of the most renowned fund managers in the midcap sector. S.Krishnakumar has been managing fund since Satish exited from Sundaram in the middle of 2012. Krishnakumar has been with Sundaram since 2003, and has a good track record of fund management.

Portfolio Construction

The fund selects good quality mid-cap stocks with stable cash flow and strong earnings potential. From a sector perspective, the portfolio has a pronounced bias towards cyclical sectors like Engineering, Banking and Financial Services, Cement and Construction, Automobiles and Auto Ancillaries etc. The portfolio is positioned to do well, when the capex cycle revives in the Indian economy. In terms of company concentration, the portfolio is very well diversified with its top 5 holdings, Fag Bearings, SRF, Wabco India, Bajaj Finance and Mahindra CIE Ipca Laboratories, Fag Bearings, Amara Raja Batteries, Bosch and Tech Mahindra accounting for only 25% of the total portfolio value. Even the top 10 stock holdings account for only 40% of the total portfolio value.

Mid and Small Cap Funds - Sector Composition and Top 5 Holdings of Sundaram Select Midcap

Risk & Return

In terms of risk measures, the volatility of returns is slightly on the higher side, relative to the midcap funds category as an average. Annualized standard deviations of monthly returns for three to ten year periods of the fund are in the range of 18 to 30%. The 5 year and 10 year standard deviations are higher than the category average. However, the last 3 years standard deviation is in line w ith the category. On a risk adjusted basis, as measured by Sharpe Ratio, Sundaram Select Midcap fund has however outperformed the category. Sharpe ratio is defined as the ratio of excess return (i.e. difference of return of the fund and risk free return from Government securities) and annualized standard deviation of returns. Higher the Sharpe ratio better is the risk adjusted performance of the fund. See the chart below, for the comparison of Sharpe ratio of the fund versus the mid-cap category.

Comparison with Peer Set

The chart below shows the comparison of the annualized trailing returns of the some of the best small and midcap funds over the last 10 years. Clearly Sundaram Select Midcap Fund's performance is right up there with its top performing peers.

Mid and Small Cap Funds - Comparison of the annualized trailing returns of the some best small and midcap funds over the last 10 years

Dividend Payout Track Record

Sundaram Select Midcap Dividend Plan has a good dividend payout track record. Since inception in 2002, the fund has paid dividends every year, except for 3 years (2008, 2011 and 2012)

Mid and Small Cap Funds - Dividend Payout Track Record of Sundaram Select Midcap Dividend Plan

SIP Returns

The chart below shows returns as on May 7, 2015 of 3,000 monthly SIP in the Sundaram Select Midcap Fund Growth Plan, for respective years since inception (in July 2002). The SIP date has been assumed to first working day of the month.

Mid and Small Cap Funds - SIP returns since inception of Sundaram Select Midcap fund

The chart above shows that a monthly SIP of 3000 in Sundaram Select Midcap fund since inception, would have grown to nearly 30 lacs, with a total cumulative investment of only 4.65 lacs. The SIP return of the fund since inception is 26.5%.

Conclusion

The Sundaram Select Midcap Fund has delivered over 10 years of strong and consistent performance. Though the recent performance of the scheme has not been as strong as its long term performance, the investment approach has the potential to generate long term capital appreciation. Investors can consider buying the scheme through the systematic investment plan (SIP) or lump sum route with a long time horizon. Investors can opt either for the growth plan or the dividend plan depending upon their individual financial plan. They should consult with their financial advisors if Sundaram Select Midcap fund is suitable for their investment portfolio.

 
-----------------------------------------------
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 Saving 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) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

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

Popular posts from this blog

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

EPFO can pay 8.5% interest in 2009-10

THE Employees’ Provident Fund Organisation can comfortably offer 8.5% interest rate to its 4.41 crore depositors during 2009-10 and still record a surplus contrary to Rs 139-crore losses suffered by it for giving the same benefit during the current fiscal. The issue of return to the depositors would be discussed at a meeting of the ‘finance and investment committee’ (FIC) on Thursday, agenda for which lists that maintaining an 8.5% interest could still give the fund a surplus of Rs 6.4 crore on the investment made by the fund. If EPFO maintains the interest rate of 8.5% on PF deposits, there will be a surplus of Rs 6.4 crore at an estimated income of Rs 12,994 crore in 2009-10. In case the interest is raised to 8.75%, the fund would suffer a loss of Rs 366.77 crore and the deficit would be still higher at Rs 739.94 crore if the rate of interest is fixed at 9%. FIC gives recommendations on financial matters to the apex EPFO body Central Board of Trustees (CBT), which takes the final ...
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