Sundaram Mutual Fund submits draft proposal for cyclical fund

Sundaram Mutual Fund has filed a draft Business Cycle Fund with the Securities and Exchange Board. Sundaram Business Cycle Fund will be an open-ended equity scheme aligned with business cycle-based investment themes. The investment objective of the scheme is to achieve long-term capital appreciation by investing primarily in equity and equity related securities with a focus on identifying medium-term cycles that are likely to impact business fundamentals. This will be done by dynamically allocating to different themes and stocks at different stages of the economic cycle.

The scheme will be benchmarked against the Nifty 500 TRI and will be managed by Ratish B Varier and Bharath S (equity investments), Dwijendra Srivastava and Sandeep Agarwal (debt investments) and Pathanjali Srinivasan (overseas investments).

The scheme offers regular and direct plans with both growth and IDCW options.

The minimum application amount is Rs 100 and in increments of 1 rupee thereafter. The minimum application amount for monthly SIP is Rs 100 with a minimum of 6 instalments. A redemption charge of 1% will be applicable if redemption/withdrawal is made on SWP within 365 days from the date of allotment. No redemption charge will be applicable if redemption/withdrawal is made on SWP after 365 days from the date of allotment.

Invest and earn with ET Money – Earn up to 9.5% annual interest

The scheme allocates 80-100% to selected equity and equity related instruments based on business cycle, 0-20% to other equity and equity related instruments, 0-20% to debt and money market instruments including units in debt oriented mutual fund schemes and 0-10% to units issued by REITs and InvITs.

The scheme seeks to apply a cyclical approach to investments by identifying economic trends and investing in themes and stocks that are expected to perform well at every stage of the business cycle. The fund manager considers various macroeconomic parameters (GDP growth, exports, interest rates, inflation etc.), high frequency indicators (Private Consumption Index, PMI etc.), business and consumer sentiment indicators (Corporate Earnings, Business Confidence Index, Future Forecasts etc.) to determine the state of the business cycle.

The Fund Manager will endeavour to allocate to companies using a bottom-up approach and by identifying economic trends will reflect key themes which it believes will ideally benefit the current business cycle.The Fund Manager may, at its sole discretion, invest up to 20% of the Scheme assets in outside key business cycle themes based on its qualitative and quantitative assessment of investment opportunities.