Sundaram Mutual announces SIP in Money Fund

Sundaram Asset Management Company, which has assets under management of about Rs 37,024 crore as of October 30, 2020, has announced the launch of systematic investment plans (SIPs) in its open-ended liquid scheme, Sundaram Money Fund. The fund house had also launched the instant redemption facility in this fund earlier this year.

SIPs are available in the growth option for both regular and direct plans of the fund, on transactions made through Sundaram Mutual website, branches & registered transfer agent (RTA) starting from November 13, 2020. Users can use the National Automated Clearing House (NACH)/one-time mandate (OTM) to set up weekly, monthly or quarterly SIPs. Weekly SIPs will be processed on Wednesdays while monthly SIPs can be done on any day of the month and quarterly SIPs on any day of the quarter beginning January, April, July, and October. The minimum SIP amount is Rs 1,000 and in multiples of Re 1, thereafter.

Who can use this facility?

Money market funds are a short-term debt fund that invests in various money market instruments with an average maturity of one year. They invest in securities such as T-bills, certificates of deposits, and commercial paper.

The average return provided by such a fund in the last one year is around 7 per cent and even for three year period, the average annualised return provided by this category is little more than 7 per cent. The post-tax return comes to around 5 per cent, assuming the investor is at the highest tax bracket. If we allow the benefit of indexation, the returns will be better. One can use it to park surplus funds lying in your savings account.

Sundaram Money Fund is managed by Dwijendra Srivastava, Chief Investment Officer, Fixed Income, and Siddharth Chaudhary, Senior Fund Manager, Fixed Income. The performance of the scheme is benchmarked against CRISIL Liquid Fund TRI.

Commenting on the release of this feature, Managing Director of Sundaram Mutual, Sunil Subramaniam said, “Savings and current accounts are often used to park surplus funds for unplanned expenses but liquid funds score over them as they can give you potentially higher returns due to ‘disintermediation’ and ‘friendlier capital gains taxation’. Sundaram Money Fund, already equipped with 24*7, 365 days instant redemption, is now a power-packed tool that allows you to set up SIPs for your surplus, ensuring that your hard-earned money is put to better use regularly.”