Sundaram MF launches 5 year close-ended equity scheme

These companies will primarily be those with a market capitalisation of less than Rs 2,000 crore at time of investment

There is no ending to the launch of close-ended equity schemes.

This time, it comes from the stable of Sundaram Mutual Fund - India's 14th largest fund house. Sundaram MF has launched its Micro Cap - Series I with a five year lock-in period. It aims to invest predominantly, between 65% and 100%, in equity or equity-related instruments of companies.

These companies will primarily be those with a market capitalisation of less than Rs 2,000 crore at the time of investment.

Fund house' equity head S Krishna Kumar will be the fund manager of this fund. According to Kumar there are several small companies in the market which have the potential to do better going forward.

The new fund offer is opened for subscription till 30th December.

Senior officials in the fund house said that they have applied for more such schemes (close-ended in nature) and will continue with more applications going forward.

Harsha Viji, managing director of Sundaram Mutual Fund, says,"There is deep value hidden among small and micro cap space and with our research-based approach we are ideally positioned to unearth these stocks for our investors."

According to Sunil Subramaniam, director (sales & global operations) at Sundaram, adds, "We believe that stage is set for the next up-move in the economy and markets. Micro caps, which are trading at significant discounts, are set to outperform the large cap space."

Before this, fund houses like Reliance MF, ICICI Prudential MF, Axis MF and Union KBC MF came up with their close-ended equity schemes with lock-in periods ranging between 3 years and 5 years.