5 things to know before investing in Sundaram Capital Protection Oriented Fund Series 17 & 18

By: |
March 2, 2017 5:28 PM

Sundaram Capital Protection Oriented Fund Series 17 & 18, as the name suggests, is a close-ended capital protection-oriented scheme. It is a scheme which protects your principal amount by investing a major portion of your money in debt funds while a little percent in equity funds in order to appreciate your capital.

The objective of this scheme would be to seek income and minimize the risk of capital loss by investing in a portfolio of fixed- income securities.

Sundaram Capital Protection Oriented Fund Series 17 & 18, as the name suggests, is a close-ended capital protection-oriented scheme. It is a scheme which protects your principal amount by investing a major portion of your money in debt funds while a little percent in equity funds in order to appreciate your capital.

This product is suitable for investors who are looking for
• Income over medium to long term
• Investment in fixed income securities and long-term capital appreciation by investing a portion of the assets in equity and equity-related instruments

Before investing into such funds, make a note that there are no guaranteed returns.

Here are five things to know about the close-ended capital protection-oriented scheme:

Investment Objective
The objective of this scheme would be to seek income and minimize the risk of capital loss by investing in a portfolio of fixed- income securities. The scheme may invest a part of the assets in equity to seek capital appreciation. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

The scheme will invest primarily in a portfolio of money market securities and fixed-income securities. It may invest a part of the assets in equities to seek capital appreciation.

Investors are neither being offered any guaranteed/indicated returns nor any guarantee on repayment of capital by the scheme. There is also no guarantee of capital or return either by the mutual fund or by the sponsor or by the Asset Management Company.

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Rating
The scheme’s portfolio structure has been rated as AAA(so) by CRISIL for its capital protection orientation. This rating indicates the highest degree of certainty regarding timely payment of the face value of the units to the unitholders on the maturity of the scheme. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. The rating is not an opinion on the stability of the scheme’s NAV. Before its maturity date, CRISIL reserves the right to suspend, withdraw or revise the above ratings at any time, on the basis of any new information or unavailability of information or any other circumstances which CRISIL believes may have impact on the above ratings.

Maturity Period
The tenor of the scheme is 3.5 years and is reckoned from the date of allotment. If the maturity date is not a business day, the subsequent business day shall be considered as the maturity day for the scheme.

Offer Price
During the New Fund Offer period, the units will be offered at Rs.10/- each.

Asset Allocation
For scheme (each series) having tenure up to 1100 days


i. The scheme shall not invest in foreign securities / ADRs/ GDRs
ii. The scheme shall not engage in securities lending/borrowing and short selling
iii The scheme shall not invest in repo in corporate debt, credit default swaps or in securitized debt
iv The scheme shall not invest in derivative instruments

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Risk Profile
Diversification: the funds intend to invest in securities issued by a wide spectrum of issuers; straddling across segments and different types of instruments.

Concentration: Diversification strategy followed by the scheme, whereby the scheme will invest in securities issued by various issuers, will help mitigate concentration risk.

Liquidity: The scheme intends to invest predominantly in liquid instruments and also maintain optimal cash/cash equivalents to mitigate any liquidity risk.
Before choosing any product, investors should consult their financial advisers so as to know whether the product is suitable for them or not. Do your investment as per the financial goal’s need.

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