Sundaram BNP Paribas Tax Saver (G) Outperforms - Dec 09, 2008

Background: Sundaram BNP Paribas Asset Management Company Ltd., a fully owned subsidiary of Sundaram Finance. The AMC was started in 1996 as a joint venture between Sundaram Finance (61%) and Newton Investment Management (39%). Subsequent to the acquisition of Newton by US-based Mellon Financial Corporation, Sundaram Finance, in 2002, acquired the 39% stake of Newton in the AMC. The fund house manages assets worth Rs 9628.23 crore in November 2008.

Sundaram BNP Paribas Tax Saver (G) an open-ended equity tax-planning scheme launched in November 1999. The objective of the scheme is to achieve capital appreciation. The minimum investment amount is Rs.500 and in multiples of Re.1 thereafter. The unit NAV of the scheme was Rs 22.86 as on 5 December 2008.

Portfolio: The total net assets of the scheme decreased by Rs 14.07 crore to Rs 434.93 crore in November 2008.

Sundaram BNP Paribas Tax Saver (G) took fresh exposure to six new stocks in November 2008. The scheme has purchased 8.89 lakh units (4.10%) of Cipla, 1.87 lakh units (2.90%) of Bharti Airtel, 5.01 lakh units (2.28%) of CESC and 4.59 lakh units (1.69%) of NTPC among others in November 2008.

The scheme exited completely from Housing Development Finance Corporation by selling 1.09 lakh units (4.31%), Tata Motors by selling 9.90 lakh units (3.79%), Nestle India by selling 1.16 lakh units (3.76%) and Bharat Heavy Electricals by selling 1.06 lakh units (3.03%) among others in November 2008.

Sector-wise, the scheme took fresh exposures to Pharmaceuticals - Indian - Bulk Drugs at 1.61% and Pharmaceuticals – Multinational at 0.59% in November 2008.

Sector-Wise, the scheme exited completely from Finance – Housing at 4.31%, Electric Equipment at 4.11%, Automobiles - LCVs / HCVs at 3.79% and Food - Processing – MNC at 3.76% among others in November 2008.

The scheme had highest exposure to ICICI Bank with 5.72 lakh units (4.63% of portfolio) followed by Hindustan Unilever with 8.22 lakh units (4.47%), Tata Consultancy Services with 3.47 lakh units (4.45%) and Punjab National Bank with 3.93 lakh units (4.06%) among others in November 2008.

It reduced its exposure to Tata Steel by selling 5.02 lakh units to 2.70 lakh units (by 2.68%), Sterlite Industries (India) by selling 1.01 lakh units to 2.13 lakh units (by 0.82%), ICICI Bank to 5.72 lakh units (by 0.45%) and India Infoline by selling 5602 units to 9.70 units (by 0.43%) among others in November 2008.

Sector-wise, the scheme had highest exposure to Banks - Public Sector at 9.62% (from 9.13% in October 2008), followed by Pharmaceuticals - Indian - Bulk Drugs & Formulation at 5.90% (1.75%), Telecommunications - Service Provider at 5.34 (1.59%) and Banks - Private Sector at 4.63% (5.08%) among others in November 2008.

Sector wise, the scheme had reduced exposure to Steel – Large to 0.94% (by 2.68%) Construction to 0.20% (by 2.00%), Mining/Minerals/Metals to 1.17% (by 1.00%) and Banks-Private Sector to 4.63% (by 0.45%) among others in November 2008.

Performance: The scheme outperformed the category average over all time periods. It outperformed the Sensex over all the time periods.

Over three-month period ended as on 05 December 2008, the scheme posted negative returns of 28.11% outperforming category average that posted negative returns of36.94%. It outperformed the Sensex that posted negative returns of 38.10% during the same period.

Since inception, the scheme posted 73.10% returns underperforming the category average of 210.25%.