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Personal Finance

Anoop Bhaskar Quits Sundaram AMC

Anoop Bhaskar, the head of equities at Sundaram BNP Paribas AMC, has resigned. Anoop used to manage Sundaram Select Midcap, one of the fantastic performers of the last year. Rumours are that he’ll join UTI AMC.

In his absence, N. Prasad, Chief Investment Officer of Sundaram BNP Paribas AMC, will manage the schemes Anoop used to manage.

What does this mean for you? If you call the AMC they’ll tell you everything is fine and that they have a transition plan in place. And that their investments are part of a discussed strategy and if the fund managers go the strategy will still continue as usual.

That’s a load of bull.

Fund managers are smart people that are hired to run mutual fund schemes. In fact, a fund manager is so important that you have to put his/her name in the offer document.

Managers are responsible for taking calls on buying and selling but usually don’t take their decision in isolation. While they will try and create a fall option, managers are usually well informed and will take the final responsibility of a strategy. When they leave, usually it takes a little bit of time for the next person to take the same kind of strategy forward.

SBI’s Sandip Subherwal was an excellent fund manager. But after he left, SBI funds have still done well. But there are a number of other cases where fund manager churn has been followed by lowered performance: Samir Arora from Alliance Capital, Nilesh Shah from Franklin Templeton etc.

But in this case, L. Prasad is a smart manager as well and you may not see too much of an impact. Either ways, stay invested but don’t buy any more until you can see the performance impact for at least two quarters, perhaps even a year.

  • Anonymous says:

    >This brings back the whole fund houses who rely on star managers vs. fund houses that rely on good team work and processes debate. The latter is more preferable because fund managers are always susceptible to change positions (not that I blame them). This is even more relevant considering the number of new fund houses that are planning to set up shop in India.

    Just yesterday personalfn.com wrote that they recommend fund houses like FT, HDFC and DSP because of the team management and superior processes. They also never recommend SBI.

    I have always heard that Sundaram was a conservative, well-managed fund house. Hopefully the impact on Select Midcap and other funds won’t be too much. Who do you think are the best fund houses in India?

    Srini

  • Vikram says:

    >Deepak
    I’m invested in Sundaram Select Midcap through SIP whose last instalment was over this month. Should I renew this SIP or start another SIP with another fund?

  • Deepak Shenoy says:

    >Srini: I love SBI – the performance is simply excellent. I don’t know why PersonalFn doesn’t like them, but as far as performance goes they are just top of the table types.

    Any “midcap” fund cant afford to be conservative, and Sundaram has that, and “small cap” funds as well. I think Anoop Bhaskar was a key player there and would have to wait and see if they really keep up the performance.

    HDFC, FT and DSP also have star fund managers (check them out) and are as susceptible to fund manager churn as any other. But their systems do help them check teh risk better – it also reduces returns (as you would have noticed with their top equity funds)

    Vikram: If you can wait a quarter or two, I would recommend that you do so. Check performance and then invest. No point investing when you know there is a fundamentally changing event.

  • hari says:

    >HI DEEPAK ,

    Thanks for the update. I would like to add one more thing here. Anoop Bhaskar was also supposed to be in charge of the 2 recent NFO’s
    Select small cap and Equity Multiplier schemes.Who will be taking care of them. I have invested in Small cap NFo because of Anoop Bhaskar.Now he has quit.

    Secondly the point on SBi is valod. In personalfn they recommend FT TAX SHILED but not Magnum Tax Gain.Only God know what they are thinking.

    Also one more thing Deepak,for the 1.1 lakh tax exemption is there any time frame so that we can wait with cash so that we can invest in the lows as you have mentioned in the other article. Will there be any small correction for us to get in. Your views please.Also can you
    suggest a good ELSS.(HDFC TAX SAVER or Magnum Tax Gain)

    regards& thanks

    Hari

  • Deepak Shenoy says:

    >hari: I think L. Prasad will take over all existing schemes managed by Anoop Bhaskar.

    For the tax exemption, I would heartily recommend SBI Magnum taxgain. As I mentioned, time it after the results so you know when you are investing how much value there is – but at todays rates there is definitely value.

  • Anonymous says:

    >Hi,

    I was told by a personalfn agent that management in SBI is not good and it could turn out to be another UTI.I am not sure about that but may be sbi folks are offerring them less commission as compared to other fund houses.

    One query off the topic here:Has any body opened trading account with reliance money?If yes, then can you share the details

    Thanks,
    Anshul Gupta

  • Deepak Shenoy says:

    >Anshul: Funny. SBI has been the best performing fund house over the last 10 years – their Sbi magnum global, taxgain, magnum equity etc. are in the top 10. I haven’t heard much about problematic management.

    AFAIK, they offer the same commissions as everybody else.

    I’ve opened an account with Reliacen money and am happy with it. I pay a flat 2500 Rs. brokerage for buying/selling up to 60 lakhs worth of shares.

  • sushanth says:

    >Hi Deepak,
    I have been a consistent reader of your blog and would like to thank you for information you provide.
    The Magnum tax gain fund don’t seem to be having a growth option in it and they often declare dividend which is basically from the net asset. With regards to that for some one who doesn’t wish to receive dividend at this stage, would it be better to invest in growth fund rather than a dividend one?
    Thank you.
    -Sushanth

  • Alien says:

    >Hi Deepak…

    I made a small lumpsum investment and then recently started an SIP in Sundaram Select Mid Cap and this news make me wonder if I should just discontinue with this SIP? I also have the other half of the lumpsum and I was waiting to deploy it in this fund.. With regards to that I think I will take your advice and wait to check out the performance…

    Any suggestions with regards to the SIP?

  • Deepak Shenoy says:

    >Sushant:Magnum Tax Gain is releasing a growth option for the Magnum Taxgain scheme starting May 7, 2007. I have a letter to that effect (with my dividend warrant) but there is no official page on their web site yet.

    Alien: Last five days have been good performance (since L. Prasad has taken over) but I don’t know if this will continue. Actually the last three months the fund has done miserably, losing 5.6% in four months (I bought SBI magnum global on the same day and it’s lost only 4.5% or so)

    I’d say hold the SIP, but it’s your call really. How has your experience been (returns wise)?

  • Alien says:

    >Hi… I invested after that drop so not much experience@return but I did mark the movement over the last four days or so… but magnum global has moved better over the same time period too…. so I will keep the SIP and wait and see…

    My other fund investments are (growth options):
    Franklin FlexiCap
    Magnum Global
    Magnum Contra
    Reliance Equity
    Reliance Diversified Power Sector
    Reliance Vision
    Prudential ICICI Dynamic
    Templeton India Equity Income
    HDFC Equity
    HSBC India Opportunity

    Would you suggest any changes.. Most funds are weighted equally and I tend to put in some (50% of the money lumpsum) and the rest through SIP (lumpsum gives me time in the market and SIP allows me some amount of rupee cost averaging) .. is the theory ok? of course after ur last article I am rethinking about the SIP part, but my job nature makes it difficult at times to actively track the market…

    It would be nice to know ur views…

  • Sandeep says:

    >Friends, those of you who are not aware, Anoop had left Sundaram earlier also (about year and a half back) and after few months stint at Singapore based firm (which have promoted Lotus Mutual Fund) returned to Sundaram only in 2006.
    If you compare the performance of Sundaram while he was away and post his return it appears that Sundaram was much better without him.
    He had this habit of timing the market which may work well once or twice (luck/concidence) but not always.