Sundaram Mutual Launches Fund Targeting Mid- and Small-Cap Companies

Sundaram Mutual launched the Select Equity Ex-Top 100 Long-Short Fund, a specialized investment fund that will invest primarily in mid- and small-cap companies outside India’s 100 largest listed firms. The fund, which opened on October 21 and closes November 4, is targeting collections of Rs 350 crore in its initial offering. Madanagopal Ramu, fund manager at Sundaram Asset Management, noted that earnings momentum is currently stronger outside the large-cap universe.

The fund’s strategy is based on the observation that mid- and small-cap companies are producing a higher share of businesses growing sales, EBITDA, and profit by more than 25% year-on-year compared with large-caps. Ramu linked this divergence to a broadening capital expenditure cycle, noting that global spending related to artificial intelligence is extending into hardware and power infrastructure, while capital goods output in India has grown in the high teens for nearly 10 consecutive months.