Play the rural theme with Sundaram Rural India Fund
Mon, Apr 30, 2018
Source : Yash Jashnani, Citrus Interactive

Sundaram Rural India Fund is an open ended thematic fund. The primary investment objective of the scheme is to generate consistent long-term returns by investing predominantly in equity or equity-related instruments of "Companies that are focusing on Rural India". The fund has an AUM of Rs. 2,355 crore as on March 2018 which has increased by Rs 1,430 crore compared to March 2017. 


The fund’s performance across various time horizons is good as seen in the table given below. It has outperformed its benchmark in the year to date (YTD), 3 year, 5 year and since inception time periods whereas it has underperformed in the 6 Month and 1 year time periods. The underperformance in the last 1 year period has been marginal.

Scheme Name


6 Months

1 Year

3 Years

5 Years

Since Inception

Sundaram Rural India Fund














Figures are in % as on 31st March 2018; Returns above 1 year in Compounded Annual Growth Rate (CAGR)

In terms of the calendar year returns the fund has beaten its benchmark in all time periods except in 2013.

Scheme Name






Sundaram Rural India Fund













Sector concentration: The fund’s concentration in the top 3, 5 and 10 sectors is as mentioned below.


Top 3

Top 5

Top 10

Sundaram Rural India Fund




All figures in %

Company concentration: The fund’s Concentration in the top 3, 5 and 10 companies is as mentioned below.


Top 3

Top 5

Top 10

Sundaram Rural India Fund




All figures in %

Number of Equity Holdings: The Fund currently holds 65 stocks in its portfolio (31st March 2018), which is higher than the median stock count of the thematic category, which currently stands at 36. In the last 5 years the equity holding averages to 52.

Sector concentration, Company Concentration and number of stock holdings signifies that the fund maintains a fairly diversified portfolio.

Cash Equivalent:        

Its cash equivalent for February 2018 was 4.15%. The average cash allocation for the last five years is 4.18%. Its maximum allocation to cash over the last two years is 11.88% in December 2016.

Portfolio Characteristics:

The top 5 sectors Household & Personal Products, Consumer Food, Pesticides & Agrochemicals, Automobiles - Passenger Cars and Fertilizers.

In the last 6 months the fund has bought Bandhan Bank Ltd., City Union Bank Ltd., Godrej Agrovet Ltd, Greenlam Industries Ltd., ICICI Lombard General Insurance Co Ltd, Jain Irrigation Systems Ltd., L&T Finance Holdings Ltd., MAS Financial Services Ltd., Tamil Nadu Newsprint & Papers Ltd., The Ramco Cements Ltd. and TTK Prestige Ltd.

Ambuja Cements Ltd., Avadh Sugar & Energy Ltd., Dhampur Sugar Mills Ltd., Dhanuka Agritech Ltd., Eveready Industries (India) Ltd., Jagran Prakashan Ltd., Rashtriya Chemicals & Fertilizers Ltd. have been dropped from its portfolio. Stocks of Eveready Industries (India) Ltd. has been bought and sold in the portfolio.


The scheme would invest 70% - 100% in equity & equity related securities of companies focusing on rural India, including investments in derivatives. The scheme would invest upto 30% in other equities, including derivatives. The scheme would also invest upto 15% in money market instruments.

The scheme may invest up to 35% in overseas securities.

Pending deployment in terms of the investment objective, funds may be invested in short-term deposits with scheduled commercial banks in accordance with applicable SEBI guidelines. The Scheme shall not invest in repo in corporate bond. Exposure to derivatives will be limited to 50% of the net asset value of the Scheme at the time of transaction.

Since the scheme focuses on investing in companies on rural India, the fund manager identifies the following industries which in his opinion focus on Rural India. The following classification is based on the recommended guidelines of AMFI (Association of Mutual Fund Industry in India).





Pesticides & Agrochemicals

Personal Care


Plastic Products

Air Conditioners


Consumer Electronics

Tea & Coffee

Cycles & Cycle Parts


Picture Tubes

Compressors & Pumps


Diesel Engines



Consumer Diversified


Consumer Foods


The above list is only indicative and not exhaustive. The fund manager will make necessary modification in the list based on further studies and research on the industries. Besides the fund manager will make investment in any other sector or company that services the Rural India.

The fund manager has a research set up that works to identify investment opportunities through continuous research on sectors and companies. The analysis focuses on the past performance and future prospects of the company and the business, financial health, competitive edge, managerial quality and practices, minority shareholder fairness, transparency. Companies that adequately satisfy the prescribed criteria are included in the portfolio. The weights of individual companies will be based on their upside potential to downside risk.

Since the fund invests in companies that essentially focus on rural India, industries such as agro chemicals, pesticide, sugar, coffee, tea, jute products etc. are subject to the vagaries of nature like erratic monsoon, failure of crop, folds, drought etc. hence the performance of the fund will be affected by it. Industries such as Jute, man-made fibre etc., are cyclical or seasonal in nature. They are driven by demand which may not be consistent in a time period.

The performance of the fund will also depend upon the government and its policy. The growth oriented policy adopted by the government and its ability to execute projects within a given time frame will also have a bearing on the performance of the fund. The growth of companies that focus of Rural India is greatly dependent on the government’s fiscal policies and legislation.

Fund Manager

S. Krishnakumar

Mr. Krishnakumar is the Chief Investment Officer of Equities at Sundaram Asset Management Company. He joined Sundaram Mutual in December 2003 as Equity Research Head before moving in to the fund management team. His previous experience includes 6 years in Lucas TVS and 7 years in Anush Shares & Securities.

He is the Fund Manager of Sundaram Select Mid Cap, Sundaram S.M.I.L.E, Sundaram Select Small Cap Series, Sundaram Select Micro Cap Series, Sundaram Tax Saver, and Sundaram Value Fund.

Mr. Kumar is a BE from Regional Engineering College, Trichy, now National Institute of Technology, and a PGDBA (Financial & Portfolio Management) from LIBA, Chennai, has close to 27 years of experience, of which 20 years are in Equity Markets.

Shiv Chanani

Mr. Shiv Chanani, CFA is a Fund Manager of Equity at Sundaram Asset Management Company Ltd. since January 2013. He is the dedicated fund manager for investments in overseas securities. Mr. Chanani joined the firm in 2011. Previously, Mr. Chanani was Head of Equity Research since September 2011.

He received the Chartered Financial Analyst designation in 2003. He has several years of experience in equity research and fund management. Mr. Chanani holds a PGDM in Finance from Indian Institute of Management Bangalore which he received in 2000 and graduated in Commerce from St. Xaviers College, Calcutta University in 1997.

Our View

Sundaram Rural India fund is the only open ended mutual fund scheme currently which is focused on the rural sector. With the government’s push to the rural sector this is a promising area. However, since it is a thematic fund, it is prone to risks affecting the rural economy – such as government policies, weather conditions and so on. It is suitable for investors who can allocate a percentage of the portfolio to aggressive thematic funds.


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