Sundaram Equity Plus Fund-NFO: Review Analysis & Details

Details about Sundaram Equity Plus Fund NFO: Review, Analysis, Details & Opinion.
It was recently that the Birla Sun Life Mutual Fund house came out with its Gold based ETF or Gold Exchange Traded Fund: Birla Sun Life Gold ETF-NFO (See Details), followed by Quantum Gold Savings Fund NFO. Here is another gold based or better to say gold mixed fund from the Sundaram Mutual Fund house called the Sundaram Equity Plus Fund

In this article, we will analyze how good is this Sundaram Equity Plus Fund NFO, whether this Sundaram Equity Plus Fund offers anything new or unique for the investors and whether the investors should invest in Sundaram Equity Plus Fund.

Sundaram Equity Plus Fund NFO: Review Analysis & Details

Let's begin with some basic details about Sundaram Equity Plus Fund.
So in a nutsheel, what this Sundaram Equity Plus Fund will do is collect money from investors and put it in Equities as well as Gold. So its a fund where you get a mixed exposure to equities as well as gold. The reason being advertised by Sundaram Equity Plus Fund is that along with equities, gold too is expected to give good returns hence one should go for a mix of the two. The ad also carries some punchlines like "you believe equities will give good returns, while your wife thinks that gold will be better for investment, and hence the Sundaram Equity Plus Fund".
So if you also are in a similar situation :) and trust that Sundaram Equity Plus Fund managers will be able to generate good returns for your money, then this is the fund for you.
What are the NFO dates for Sundaram Equity Plus Fund?
The NFO period for Sundaram Equity Plus Fund is frm 4 May 2011 and will close on 16 May 2011.

What is so unique about this Sundaram Equity Plus Fund?
First and foremost, this fund offers a mix of gold and equities and that's what makes it unique.
It is stated that upto 35% of the money will be invested in Gold based ETF, so that means your invested money will get quite a good exposure to gold.
And that what the word "PLUS" in the name of this fund mean, plus indicates Gold as an additional invested asset, it does not indicate that returns will always be plus or poistive.
On the equities side, the fund claims to keep it exposure to large cap Indian equities and will have around 65% exposure to equities.

Asset Allocation will be as follows:
Equities: 65% to 85%
Gold ETF: 15% to 35%
Debt instruments: 0% to 20%

No tax benefit will be available in Sundaram Equity Plus Fund.

What are the other competitor products available in comparison to Sundaram Equity Plus Fund?
We aren't aware of any Gold and Equity based mutual funds currently avaialble in the market.
However, one can go for a mix bag on his own by selecting a equity based mutual fund and gold ETF. There is a lot of choice for Gold based ETF's as there are a lot of Gold based ETF's and Gold based Mutual Funds available:
Here is the List of Gold ETF India available for trading on NSE

Other Gold ETF's include: HDFC Gold ETF: Review Analysis & Details Then there is the Quantum Gold Fund (Gold ETF) and ICICI Prudential Gold ETF, then SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme

What are the risks of investing and trading Sundaram Equity Plus Fund?
First and foremost, you are giving your money to fund managers who will be investing it as per their thought. You run the risk of the fund managers not able to keep up the returns in positive territory.
Second, there is a asset category risk. What if equities or stock market falls? What if Gold prices fall?
Although gold prices (along with silver) have been shooting up and up in the recent times, there is no guarantee that it will continue to do so in future as well.
If you are interested in looking at how Gold prices have performed historically, see Gold ETF: Historical Performace of Gold ETF

Final Thoughts about Sundaram Equity Plus Fund?
A good fund for investors who trust the Sundaram fund managers and their investment skills and also believe that both equities and gold will generate positive returns.
This fund provides a good mix of investment in gold and stock market for people who want a mix of both.

During NFO period each unit cost Rs. 10 per unit during NFO period
Minimum investment Rs 5000 and in multiples of Re 1 afterwards.

Multiple options available for investments in Sundaram Equity Plus Fund :
Growth Option
Dividend Option - Payout, Reinvestment facilities

Sundaram Equity Plus Fund Entry Load: Nil
Sundaram Equity Plus Fund Exit Load: 1% if exit within 1 year, NIL afterwards.
SIP or systematic investment plan? No info available about that.
No tax benefit will be available in Sundaram Equity Plus Fund