Sundaram Capital Protection Oriented Fund - Series 2

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Traditional savings schemes and fixed deposits offer safety at the cost of lower returns. Although equity markets provide the possibility of higher returns, not everybody can endure the volatility associated with them. In such a scenario, there is a need for a product that can offer you the capital safety features of fixed deposits along with the ability to deliver higher returns. Sundaram Capital Protection Oriented Fund – Series 2 seeks to seamlessly achieve the best of both worlds! It is a 5 year close ended scheme that seeks to maximize returns while ensuring protection of your capital. The scheme predominantly invests in high quality AAA rated bonds while taking a marginal exposure to equities and related instruments.

Investment Strategy:

Sundaram Capital Protection Oriented Fund aims for fixed deposit-plus returns without losing sight of capital protection orientation. The scheme endeavours to preserve your capital by investing primarily (about 70%) into high quality fixed income instruments. As the debt papers are held till maturity, changes in interest rates would not affect the scheme’s objectives. It also seeks to generate capital appreciation by investing a part of the funds (about 30%) into stocks forming part of S&P CNX 500 Index. (An analysis of the performance of S&P CNX 500 Index over 5-year periods (1,373 periods since March 2002) shows that there was not a single period of negative return! The lowest return was in fact 5.31%). The scheme’s equity portfolio would be multi-cap oriented in a bid to outperform the broader market indices. The scheme has been rated AAA (so) by CRISIL indicating highest degree of certainty regarding the timely payment of face value of investment.   

Reasons to invest in the fund:

• Diversification – Portfolio mix of debt and equity securities

• Low Interest Rate Risk – Debt papers are held until maturity

• Low Credit Risk – Investments in high quality AAA rated debt papers

• Tax Efficiency – Benefit of Indexation on Long Term Capital Gains

• Returns – Inflation beating returns by investing in equities

• Conservative Investors: Equity participation with capital protection orientation

Fund Features:

Particulars	Details
Scheme Type	Close ended capital protection oriented scheme
Maturity Period	5 Years
NFO Opens	February 15, 2011
NFO Closes	February 28, 2011
Asset Allocation:
Debt & Money Market Instruments	70-100%
Equity & Related Instruments	0-30%
Entry & Exit Load	Nil
Options	Growth & Dividend Payout
Benchmark	CRISIL MIP Blended Index
Minimum Investment	Rs.5,000
Fund Managers	Dwijendra Srivastava & S. Krishna Kumar