Sundaram Mutual believes the market turmoil is not over yet, even though its shares plunged 6% following the unexpected election result before recovering 3% on Wednesday.
Anand Radhakrishnan, CEO, Sundaram Mutual, said some sectors such as infrastructure and capital goods have soared in the last few years and while the momentum has subsided a bit, market valuations remain high.
Given the heightened uncertainty, mutual fund investors should temper their expectations and remain focused on getting above-inflation returns from equity investments, he added. He has launched a unique cyclical-themed fund that opens for subscription on Wednesday and closes on July 1.
The fund will invest in four broad themes — Make in India, Urbanization, Sustainability and Technology (MUST for short) — with dynamic allocation across sectors and market caps and the freedom to include or exclude new themes.
Sunil Subramaniam, managing director at Sundaram Mutual, said the themes are driven by broader macroeconomic trends such as technology and innovation, government policies and spending, urbanisation, formalisation and premiumisation, which can help outperform the broader market. “Our fund will adopt a dynamic, thematic approach and identify and capitalise on four to five emerging medium to long-term mega global and local trends that are at inflection points across sectors,” he said.
Sundaram Business Cycle Fund will invest in a portfolio of 35-45 stocks across sectors and market caps, benchmarked against the Nifty 500 TRI. It is market cap and sector agnostic and will focus only on high potential opportunities that leverage key themes.
The Company will invest a minimum of 80% in equities and related instruments selected on a cyclical basis, 0-20% in other equities and related instruments, bonds and money market securities and 0-10% in units of REITs and InvITs.
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