Sundaram Growth Fund is a Large cap investment with the highest exposure in the Banking & Financial Services sector followed by Oil & Gas and IT. This fund is been delivering tumbling performance and hence investor should look at other alternatives in the Large cap segment, reckons financial advisor Arnav Pandya.
This is a large cap focused fund from the Sundaram Mutual Fund stable though it also has a small exposure to mid cap stocks. At the end of August 2010, the fund had the highest exposure to Financial services with around one fifth of the total portfolio in this area. Auto had the second highest exposure with a share of around 9 per cent while services, Pharma and Consumer goods had an 8 per cent exposure. In terms of individual holdings, Tata Motors was at the top spot with a 5 per cent exposure followed by ICICI Bank, Bharti Airtel, Infosys, Bank of India and Spicejet. The fund was beating its benchmark the BSE 200 over the one, five and seven year time period.
Six months later, Financial services remained the top sector but with a slightly lower exposure of around 17 per cent. There was a change in the other positions as Energy- oil & Gas and IT jumped ahead of the other sectors and both of them had a double digit exposure. There were a total of 44 stocks in the portfolio and the turnover ratio was 180 per cent which can be considered as on the higher side. Infosys was the top individual holding followed by ICICI Bank, SBI, Reliance Industries, Bharti Airtel, and Cairn India. The fund was outperforming the benchmark over the one year time period but not the three and five year one.
There was a sharp change in the position of the portfolio with respect to IT stocks at the end of August 2011 as the share of this area dropped significantly. Financial services remained the top sector followed by Energy- Oil & Gas and Consumer goods but there was also a very significant 11 per cent of the portfolio that was in cash. The total number of stocks in the portfolio dropped to 40 and there was also a slight reduction in the portfolio turnover ratio of the fund. Bharti Airtel was now the top holding with a 6 per cent share followed byITC, SBI, ICICI Bank, Reliance Industries and Infosys. The fund was now an underperformer over the one, three as well as five year time period.
Six months later the fund had reinvested a large part of the Cash on its books and now financial services remained the top sector followed by Energy-Oil & Gas, IT and Consumer goods. The portfolio turnover for the fund continued to fall and now ICICI Bank was the top holding. Infosys, SBI, Axis Bank, Bharti Airtel, Reliance Industries and TCS were some of the other top holdings in the fund. The fund continued to underperform the benchmark over all the time periods upto five years.
The share of Financial services in the portfolio had crossed the 20 per cent mark at the end of August 2012. IT was next followed by energy - oil and gas, industrial manufacturing and consumer goods. The fund had 45 stocks in its portfolio and its turnover ratio remained over 125 per cent. L&T was the top stock in the portfolio followed by Infosys, Reliance Industries, ICICI Bank and Bharti Airtel. The fund was a slight outperformer over the three year period but remained an underperformer over the one and five year period at the end of June 2012.
Investors can look for other alternatives in the large cap mutual fund space as this fund has not been consistent in its performance over the last couple of years.