Main Homepage
  About Us     Products     Facts & Figures     Applications     eBranch     NRI Centre     Planning Centre   Info Centre  
Our Profile
Sponsors & Management Board
Our Team & Functional Divisions
Work with us
Our Offices
Our Advisors
Daily NAV Table
Dividend History
Transact online facility
for investors
For assistance , let our
executive call on you.
This section spells out the investment philosophy theory
and the SUN F&C investment philosophy that guides
the day-to-day investment management in all its schemes

  1    2    3    
SUN F&C's Investment Philosophy
We explain SUN F&C's investment philosophy in this section. There are essentially three philosophies, for equity, for debt and a separate philosophy for the Mindware sector (IT, media, telecom, etc.). This is because the traditional house philosophy on equity is not entirely suitable for mindware sectors schemes because such schemes invests predominantly in sunrise industries where traditional methods of share valuation are not usually applicable as there is no track record to use at indicators such as P/E and P/Book Value.

Equity Investment Philosophy

SUN F&C's equity investment philosophy has been based on the concept of bottom-up approach and value investing.

Value investing has been used successfully in various markets around the world. We, at SUN F&C, have been using it effectively in India too. Valuation criteria are combined with business indicators to arrive at an appropriate value portfolio.

Valuation Criteria

Stock selection is not to be construed as a science or an art. It is our belief that it is a prudent mix of both. While doing so we use the following measures to initially select the companies we believe might be value opportunities. These measures help assess relative value and are used as a comparison between :
~ the companies and the market
~ the companies and the industry and sector they belong to; and
~ a company's own historic share price range
~ identifying growth at a price which represents value. Value means buying growth at a price which in P/E and EPS terms is reasonable.

It may be noted here that no single measure should be looked at in isolation.

Trading Volumes
Although there are some significant value opportunities among some of the smaller companies in the Indian market, the lack of liquidity in these 'small cap' shares would stop us investing in them. However, because the growth rate in such companies tend to be higher they would form a small part/ component of the portfolio. Typically, we would only include companies with reasonable levels of liquidity thus ensuring that we could buy and sell the value shares.
Price/Earnings (P/E) Ratio
Explained in the Common Terms section. We analyse this ratio against the market, the sector and the company's historic five-year range.
Price/Book Ratio
Explained in the Common Terms section. In India, book values are often meaningless due to the treatment of assets such as land, which are infrequently re-valued. However, adjustments can be made and the P/B ratio can be quite useful in evaluating certain types of situations, such as take-over candidates.
Business Indicators
Once potential value has been defined, our fundamental analysis of the company aims to determine whether this value will be realised. We focus on business indicators to evaluate this. Management is clearly the most important factor as it drives all else. We aim to meet the management of every company before investing in it. At these interactions , we discuss the company's strategy in detail. We consider companies that have a good strong market position and where we see potential for market share growth. We also focus on a company's cost base and product strength. Importantly, we also lean towards investing in companies that maintain financial prudence, which helps avoid potential disasters in recessionary conditions

Thus it is possible to use a disciplined value approach to pick a quality portfolio that should outperform the markets over the medium term, while at the same time, should lessen the downside risk when markets decline. This approach of Value Investing combines a pure number-driven, value approach with a more subjective look at the companies in question.

This philosophy is actively followed in the management of the Value Fund, the equity portion of the Balanced Fund and the Resurgent India Fund.

  1    2    3    
::::::: About Us   |   Products   |   Facts & Figures   |   Applications   |   eBranch   |   NRI Centre   |   Planning Centre   |   Info Centre   |   Disclaimer  :::::::  
::::::::::::: Copyright © 2002 SUN F&C. All rights reserved. :::::::::::::