The Sundaram Asset Management Company has been into the mutual fund market for over 20 years. The AMC has introduced many schemes in the passage of time according to the different ideology of the investors. Almost all the schemes have created a benchmark in their respective categories. In the small cap funds, Sundaram Small Cap Fund is one of the top performing mutual funds in India.
However, market volatility can appear anytime thus, investors should analyse all the necessary information about the scheme before investing. Below are the 5 things that investors should keep in mind before investing in a small cap fund of Sundaram.
5 Key Points to Remember Before Investing in Sundaram Small Cap Fund
1. Basic Information: The date of inception of the mutual fund, NAV, and the total AUM are some of the basic details that an investor should know before investing their money not just in Sundaram Midcap Fund but in any other scheme as well. For instance,
Date of Inception: 15th February, 2005
AUM: Rs. 1,190 Crore (as on 31st March, 2019)
NAV: Rs. 83.88 (as on 16th April, 2019)
Exit Load: 1% for redemption within 365 days
Expense Ratio: 2.26% (as on 31st March, 2019)
These above details about Sundaram Small Cap Fund tells that the scheme has been into the finance market for a longer period of time and thus have witness all the market cycles. The ever-growing AUM is a clear indication of the faith of the investors. The exit load and expense ratio are also important to know as these factors can increase/decrease your profit.
2.Investment Style: Majorly there are two style of investments- growth investing and value investing. The growth style of investment focuses on the stocks of the companies that are expected to showcase above-average growth rate in the future whereas the value investing plays a bet on the stocks that are currently undervalued but have high potential to generate superior valuations in the future. Thus, according to the choice, the investor should choose their plan. Moreover, the Sundaram Small Cap Fund follows a growth style of investment which is more inclined towards small-sized companies.
3.Portfolio Analysis: Always know the asset allocation of the fund before parking your cash in the fund. In case of the small cap fund of Sundaram MF, 98.31% is diversified in the equity market and the rest (1.51%) is allocated to the debt instruments. If we look at the market cap allocation, then the percentage of assets allocated to the small cap and mid cap funds are 86.1% and 13.90%, respectively.
4.Allocation of Assets: The fund has diversified the assets in the large number of sectors which plays an important role in risk management as the loss generated by a single sector can be compensated by the other sectors. With 24.81%, the construction sector holds the maximum amount of shares followed by other sectors like, engineering (16.31%), services (10.5%), automobile (9.53%), healthcare (7.1%), etc.
5.Past Performance: This is again an important point that should always be there in your check-list. The previous track record of a fund should be promising. The 5,7, and 10-year annualized returns of Sundaram Small Cap Fund is 18.53%, 16.18%, and 18.83%, respectively. The growth have been consistent and stable in the long term.
The scheme has all the qualities of the best small cap fund. Thus, if you are looking for a fund that can provide you superior returns in the future, then you should consider including Sundaram Small Cap in your portfolio. Furthermore, if you require any other suggestions regarding the mutual fund market then feel free to contact our financial expert by visiting our website MySIPonline or call us at 9660032889.