Sundaram Mutual Fund is all set to launch Sundaram Balanced Advantage Fund. The NFO of this dynamic asset allocation fund opens on February 14, 2020 and closes on February 28, 2020.
The scheme aims to provide accrual income and capital appreciation by dynamically managing the asset allocation in equities, fixed income and REITs/InvITs.
At a press conference in Mumbai, Sunil Subramaniam, Managing Director, Sundaram MF said, “Equity as an asset class is the best place to build wealth for your financial goals. However, equity comes with volatility. To offset this, most of us have a portion of our portfolio in fixed income, which helps us balance out the risk, at the cost of returns.”
“Sundaram Balanced Advantage Fund aims to strike the right balance between risk and reward – with flexible allocation across asset classes to deliver superior risk-adjusted returns over the long-term,” Sunil said.
Depending on prevailing market and economic conditions, the fund will decide asset allocation. The investment strategy of the fund would be to build a multi cap portfolio – allocating based on valuation differentials in P/E across cap curves and sectors, with a high quality diversified fixed income portfolio focusing on generating accrual income.
“Stock selection would be bottom-up using a 5S framework i.e. simple businesses, sound management, scalable opportunities, sustainable competitive advantage, steady and sustainable cash flows,” a press release by the fund house said.
S. Krishnakumar, CIO - Equity, will manage the fund with equity fund manager S. Bharath. Dwijendra Srivastava, CIO- Debt, Sundaram MF will manage the fixed income portion. Performance of the scheme is benchmarked against CRISIL Hybrid 50% plus 50% Moderate Index.
This fund house has set the minimum SIP and lump sum investment amount in this scheme at Rs 100.
Even as the cost of acquisition is much higher than Rs 100 for AMCs, Sunil feels that the minimum investment amount could help in bringing investors who are at the bottom of the pyramid.
“The idea is to offer a minimum investment amount that will serve as an easy entry point for the investors at the bottom of the pyramid. We are hopeful that gradually these investors will increase their allocation,” Sunil said.
