Sundaram Growth: Hold

Recommendation: Hold

Aarati Krishnan

THE RECENT SEBI directions on investments by funds in individual stocks, have forced concentrated funds to prune exposures in top holdings in tech stocks. Sundaram Growth Fund, which has been almost dogmatic about restricting exposures in individual stock holdings, has not had to face such a problem.

The fund has traditionally restricted individual exposures in its portfolio to 5 per cent or less of the net asset size.

However, due to this penchant for diversification, the fund has remained a moderate performer among the equity-oriented schemes, seldom topping the performance charts. This has continued in the past quarter, though Sundaram Growth Fund has not lost as heavily as some of concentrated equity funds. The fund's NAV, which lost around 25 per cent in the six months to July 2000, marginally outperformed the broad-based market indices. Investors desiring steady-to-moderate returns, can remain invested in the hope of a further recovery in the broad markets.

The fund follows an active trading approach for managing its equity portfolio. Between June 30 and July 31, Sundaram Growth Fund maintained its existing positions in technology stocks, while adding selectively to its FMCG, pharma and economy-linked holdings.

New stocks: The fund has added quite a few non-technology stocks in July. Dabur India, Vikas WSP, Siemens are three entirely new acquisitions.

Enhanced holdings: Grasim and Concor are two stocks which the fund has bought in substantial numbers. The fund bought 6,000 shares of the former and 7,131 shares of the latter during the month. Apart from this, the fund has added to its holdings in Blue Dart Express, Reckitt & Colman, Wockhardt Pharma, Ashok Leyland, VSNL. HCL Technologies and Zee have been the only two technology stocks where positions have been enhanced.

Trimmed: Jupiter Organics and Madras Cements, two stocks which featured in the end-June portfolio, were trimmed from the portfolio by end July.

Sectoral shifts: The sectoral profile of the fund has not undergone very significant changes over July. While exposures to IT stocks fell marginally from 27.7 per cent in June to 23.4 per cent by July, other sectoral allocations changed less than a percentage point.