Sundaram Money suits investors looking for a scheme with reasonable costs.
Background: Sundaram Money was launched in March 200. The fund charges no entry or exit load. The minimum amount required to be invested in the fund is Rs 10,000.
Performance and portfolio: Since December 2003, the fund has outpaced its peers every quarter. This it has done by discarding caution and taking higher interest rate risks.
Earlier, the fund used to play safe by keeping the average portfolio maturity below 80 days. However, this strategy often led to underperformance. Things changed in late-2003 when the fund decided to take a little more risk and pushed its average maturity higher. Since then, it has remained in the band of 130 to 160 days (and as high as 310 days in December last year).
The fund maintains a high quality portfolio. Below-AA papers have rarely touched a double-digit figure. Interestingly, in February 2004, the fund had 16 per cent exposure to gilts which is rare among cash funds.
At present, P1+ papers dominate the portfolio with nearly two third of the corpus parked in them. AA papers and cash and bank deposits account for around 22 per cent of the portfolio.
On the expense side, the fund has staged a strong comeback. From a high of 0.93 per cent in 2003, the expense ratio has dipped to 0.48 per cent, way below the category average of 0.63 per cent.
Top holdings
As on July 31, 2005
Value (Cr)
Net Assets (%)
HDFC
39.22
7.36
Export-Import Bank
38.90
7.30
Allahabad Bank
29.78
5.59
Karnataka Bank
28.90
5.42
Kotak Mahindra Bank
28.22
5.30
ICICI Bank
25.47
4.78
J&K Bank
24.15
4.53
ICICI Bank
19.70
3.70
Mahindra & Mahindra Finance
19.60
3.68
HDFC Bank
19.27
3.62
Cholamandalam Inv. & Fin. Co.
15.00
2.82
UTI Bank
14.92
2.80
Bharat Forge Co
10.01
1.88
Kotak Mahindra Primus
10.00
1.88
Nicholas Piramal India
10.00
1.88
DSPML Capital
9.96
1.87
Usha Martin
9.83
1.85
Bajaj Auto Fin.
9.80
1.84
ING Vysya Bank
9.71
1.82
UCO Bank
9.51
1.79
Investors looking for a high-quality consistent player with very reasonable cost would like this offering.
"� Value Research
Returns in % as on August 25, 2005
Monthly income plans (MIPs) led the way in the debt fund category. Average MIP returns for the past 12 months amounted to 11.15 per cent, fuelled by the schemes' equity component.
Debt funds Average category returns (%)
1 month
1 year
Monthly income plans
1.15
11.15
Debt - short term
0.48
5.29
Debt - floating rate
0.47
5.24
Liquid funds
0.44
5.05
Debt - medium term
0.60
4.95
Gilt - short term
0.42
4.05
Gilt - long term
0.86
3.79
Income
0.66
3.43
Funds with a short maturity continued to do better than other pure debt funds. While short-term debt funds returned 5.29 per cent for the past year, floating-rate funds and liquid funds came in next.
Leaders Liquid funds
1 month
1 year
Alliance Cash Manager-I P
0.47
5.37
UTI Liquid Fund - Cash P
0.47
5.34
HDFC Cash Mgmt Fund
0.47
5.32
Kotak Liquid - Inst Premium
0.46
5.32
Prudential ICICI Liquid
0.46
5.31
LIC MF Liquid Fund
0.47
5.30
Tata Liquid Fund - SHIP
0.47
5.30
Birla Cash Plus - Institutional
0.46
5.29
HSBC Cash Fund -
0.46
5.29
Deutsche Insta Cash Plus
0.46
5.28
Income funds continued to lag with an annual return of 3.43 per cent.
Laggards Liquid funds
1 month
1 year
Prudential ICICI Sweep Plan
0.31
3.97
Templeton India Liquid Plus
0.35
4.14
HDFC Cash Mgmt Fund
0.37
4.45
Liquid BeES
0.38
4.45
Reliance Liquid Fund
0.33
4.50
JM High Liquidity
0.41
4.68
Kotak Liquid - Regular
0.41
4.70
Grindlays Cash Fund
0.42
4.84
Reliance Liquid Fund - TP
0.42
4.85
Tata Liquid Fund - RIP
0.44
4.88
Among liquid funds, Alliance Cash Manager was the top performer with a 12-month return of 5.37 per cent, followed by UTI Liquid Fund - Cash Plan and HDFC Cash Management Fund - Savings Plus.
