Sundaram Select Midcap Fund

Sundaram Select Midcap fund is being managed by an astute manager Satish Ramanathan.Satish has been managing the fund since 2007. His knowledge of mid cap and small cap sectors has proved advantageous for the fund. It was a great performer in the past and has outperformed its benchmark the BSE Midcap several times but has above average risk. If you have invested in this fund continue to do so while keeping a close watch on its performance.

Where does Sundaram Select Midcap Fund invest your money?

Sundaram Select Midcap fund is a mid cap fund which means most of your money will be invested in medium and small companies and a small portion in large size companies. Small and mid size companies have the potential to become large companies and when that happens you are expected to get bumper returns. Unfortunately it does not happen too frequently. Large cap companies tend to be stable compared to mid cap and small cap companies. This fund has 57% exposure to stocks of mid cap companies and 32% exposure to stocks of small cap companies.

Suitable for what?
  • Creation of quick Wealth
  • Lifestyle Needs
Not Suitable for?
  • Child's Education
  • Child's Marriage
  • Planning for Retirement
  • Buying a house
  • Short term needs
How much to invest?

Minimum SIP is Rs 250 per month. Do not make Sundaram Select Midcap as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Sundaram Select Midcap Fund can be part of your satellite portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
How has Select Midcap Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched at July 2002, your value of investments would be around Rs 13.4 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.5 lakhs. The performance has been not better than or similar to other mid cap mutual funds. The fund has been giving at around 8% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in Sundaram Select Midcap through SIP for the past 5 years today you would have around Rs 8.27 lakhs.

How will Future Select Midcap Fund Perform in future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid size companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Sundaram Select Midcap fund is 1.90%. This is charged to recover the fund management company's expenses on securities' transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Sundaram Select Midcap does not qualify for sec 80C ELSS benefits.

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