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Sundaram Large and Mid Cap Fund: The fund is a resurgent performer with lower volatility

The fund’s month-end AUM almost quadrupled from Rs 156 crore in May 2016 to Rs 616 crore in April 2019

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Sundaram Large and Mid Cap Fund (erstwhile Sundaram Equity Multiplier) provides an opportunity to generate capital appreciation by predominantly investing in large and mid-cap stocks. It has been featured in the top 30th percentile in the large and mid-cap funds category of Crisil mutual fund ranking (CMFR) for the four quarters ended March 2019. 

S Krishnakumar is the chief investment officer for equities at the asset management company and has been managing the fund since December 2017. He has over 21 years of experience and manages or co-manages nine open-ended equity schemes at the fund house with assets under management (AUM) of Rs 15,787 crore as of April 2019. 

The fund's month-end AUM almost quadrupled from Rs 156 crore in May 2016 to Rs 616 crore in April 2019.

Trailing returns

The fund outperformed its peers (the large and mid-cap funds category in CMFR) in the one, two, three and five-year trailing periods, while it outperformed its benchmark (Nifty 200 TRI) across three, five, seven and 10-year trailing periods.

SIP returns

A monthly investment of Rs 10,000 through a systematic investment plan (SIP) for 10 years since June 2009 would have grown to Rs 23.48 lakh (XIRR 12.95%) on May 21, 2019. A similar investment in the benchmark would have grown to Rs 22.21 lakh (XIRR 11.9%). 

Risk-reward matrix

During the past three years, the fund delivered higher returns than its peers and the benchmark while maintaining lower volatility.

Portfolio analysis 

During the past three years, the fund maintained an average allocation of 55.96% to large-cap stocks, 23.36% to mid-caps and 13.47% to small caps. Pursuant to Securities and Exchange Board of India's (Sebi) categorisation of schemes, the fund gradually increased its exposure to the large and mid-cap segments from 67.4% in December 2017 to 93.59% in June 2018, by reducing exposure to small-cap stocks. The exposure to large cap and midcap stocks combined stands at 92.26% as of April 2019.

The fund invested in 32 sectors during the past three years, of which major contributors included banks, petroleum products and consumer non-durables.

The fund invested in 147 stocks during the past three years and held only five stocks consistently (16.28% of the portfolio). Reliance Industries, HDFC Bank and ICICI Bank have been the key contributors to the fund's performance among the consistently-held stocks. The fund manager exited stocks such as Gujarat Narmada Valley Fertilisers Chemicals, Bombay Burmah Trading Corporation, Maruti Suzuki India, BASF India and Avenue Supermarts well in time after earning handsome returns and before the fall in price.

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