Sundaram Taxsaver has proved that it can manage an adventurous life with ease. | |
| This fund chose to be adventurous last year and is doing well. However, with the markets entering an uncertain territory, the fund manager will need to be agile in case the party poops. |
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| In February 2004, Sundaram Taxsaver was undergoing an image makeover in favour of mid and small-caps. Looking at its conservative approach in the past, we were quite concerned about the fund's future prospects. |
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| However, in a year, the fund has proved that it can also manage an adventurous life with ease - the fund surged 43.78 per cent in 2004 to reserve a place in the top quartile of the category. As on November 8, 2005, it's up 33.24 per cent and is ahead of the 33.02 per cent rise of its peer group average. |
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| Earlier, Sundaram Taxsaver was a conservative player and a middle-of-the-road performer. It would neither zoom exceptionally in rising markets, nor tank in bad times. Its conservative approach helped the fund manage the difficult phases of 2000 and 2001 quite comfortably - the fund lost less than its peer group average. |
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| In the next two years, when equity markets recovered, its cautious approach resulted in the fund being an average performer. But then that's what the fund aimed for. However, things changed after 2003. |
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The fund changed its tack in December 2003 as it increased its exposure to mid- and small caps considerably. Since then, it's maintaining an average 66 per cent allocation to them.
| TOP HOLDINGS | | Equity Holdings
(As on October 31, 2005) | Value
(Rs Cr) | Net assets
(%) | | P&G Hygiene & Health Care | 0.76 | 3.73 | | M M Forgings | 0.76 | 3.71 | | Reliance Industries | 0.75 | 3.67 | | Clutch Auto | 0.64 | 3.14 | | Panacea Biotec | 0.64 | 3.13 | | Lancor Holdings | 0.63 | 3.09 | | Taj G V K Hotels & Resorts | 0.62 | 3.02 | | Thermax | 0.55 | 2.68 | | Bajaj Hindusthan | 0.53 | 2.59 | | Balrampur Chini Mills | 0.52 | 2.57 | | Shree Renuka Sugars | 0.52 | 2.55 | | Great Eastern Shipping Co. | 0.52 | 2.53 | | Honeywell Automation | 0.51 | 2.48 | | Jai Prakash Associates | 0.49 | 2.40 | | Crew B.O.S. Products | 0.48 | 2.36 |
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| This fund reaped the benefits of mid and small-caps in the booming market of 2004. It would be interesting to see how the fund manages the risks associated with smaller companies in a bearish market. At present, the fund is one of the most volatile funds in the category. |
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| But with no single stock crossing 4 per cent of the portfolio, diversification would take care of the excessive volatility. Being a tax-planning fund, Sundaram Taxsaver has time on its side. The fund manager will need to be agile in case the mid-cap party poops. - Value Research | Returns in % as on November 10, 2005 Even though equity markets witnessed a relief rally in the last two weeks, that was not enough to push up monthly equity fund returns into the positive territory. The crash in the markets during the three-week period starting October 4, affected their performances.
| EQUITY FUNDS | | Average category returns (%) | | 1 month | 1 year | | FMCG | -1.62 | 70.92 | | Banking | -7.16 | 58.18 | | Tax planning | -3.59 | 56.01 | | Diversified | -2.78 | 50.02 | | Auto | -4.12 | 48.24 | | Technology | -1.09 | 39.85 | | Index | -2.92 | 36.16 | | Pharma | -4.53 | 22.60 | | Petroleum | -1.41 | 12.84 | | | LEADERS | | Tax planning funds | | 1 month | 1 year | | SBI Magnum Tax Gain | -2.53 | 113.18 | | HDFC Taxsaver Fund | -0.61 | 90.06 | | Prudential ICICI Taxplan | -4.56 | 80.24 | | Taurus Libra Taxshield | -6.22 | 67.75 | | ING Vysya Tax Saving Fund | -2.33 | 65.54 | | Sundaram Taxsaver | -3.15 | 60.93 | | Birla Equity Plan | -0.26 | 59.92 | | Canequity Taxsaver | -6.13 | 58.32 | | HDFC Long Term Advantage | -1.61 | 58.06 | | | LAGGARDS | | Tax planning funds | | 1 month | 1 year | | LIC Tax Plan | -4.56 | 26.42 | | Principal Personal Taxsaver | -8.51 | 31.39 | | Franklin India Index | -2.65 | 33.65 | | Birla SunLife Capital | -3.51 | 36.75 | | Escorts Tax Plan | -3.86 | 43.31 | | PRINCIPAL Tax Savings Fund | -1.90 | 45.21 | | Franklin India Taxshield | -3.12 | 47.52 | | Tata Tax Saving Fund | -6.64 | 51.56 | | UTI Equity Tax Savings Plan | -3.03 | 52.13 | | Source: www.mutualfundsindia.com |
Banking funds (-7.16 per cent) were the worst performers followed by pharma funds (-4.53 per cent) and auto funds (-4.12 per cent). However, over a one-year period, equity fund performances continued to be attractive with FMCG funds again topping the table with a return of 70.92 per cent. Tax planning funds returned 56.01 per cent for the year and -3.59 per cent for the month. SBI Magnum Tax Gain was the best performer on an annual basis, managing a return of 113.18 per cent. |
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