The asset allocation under the Scheme, under normal circumstances, is as follows:

*Includes investment in equity and equity related securities of companies of all market capitalization i.e. Large Cap, Mid Cap, Small Cap companies as defined below:

• a. Large Cap: 1st – 100th company in terms of full market capitalization.
• b. Mid Cap: 101st – 250th company in terms of full market capitalization.
• c. Small Cap: 251st company onwards in terms of full market capitalization.

Equity and equity-related securities includes Convertible bonds, debentures and warrants carrying the right to obtain equity shares.

^Money Market Instruments includes Certificates of Deposits, Commercial Papers, T Bills, Government Securities having an unexpired maturity up to 1 Year, Call or notice Money, Commercial Bills, Bills Rediscounting, Reverse Repo and any other instruments as defined by RBI/SEBI from time to time.

Exposure is calculated as a percentage of the notional value to the net assets of the Scheme. The Scheme will maintain cash or securities to cover exposure to derivatives

The cumulative gross exposure to equity, debt, money market instruments and derivatives shall not exceed 100% of the net assets of the scheme, subject to SEBI circular No. Cir/IMD/DF/11/2010 dated August 18, 2010. The same-security-wise hedge positions would be excluded from computing the percentage.

Pending deployment in line with the investment objective, the funds of the Scheme may be invested in short-term deposits with scheduled commercial banks in accordance with SEBI Circulars SEBI/IMD/CIR No.9/20306/03 dated November 12, 2003 and SEBI/IMD/Cir No.1/91171/07 dated April 16, 2007.

The Scheme shall commence investment on or after completion of the New Fund Offer period. Depending on market conditions and the Investment Manager’s view, the scheme may take up to six months to the fully invested in accordance with its asset allocation.

The Fund Manager may depending on market conditions choose to deploy the funds mobilized from NFO of the Scheme over a period of 6 months in a phased manner. During this period in order to ensure that the Scheme qualifies as an equity oriented scheme (to enable those investors who may choose to redeem during this period get the benefit of equity taxation) he may choose to have a 65% or more allocation to equities, which will be offset by taking a corresponding equity derivatives position.

The scheme is permitted to invest upto 50% in equity derivatives. Hence, the scheme’s equity allocation may be 65% and more with a corresponding off setting equity derivatives position of upto 50%.

The equity derivatives allocation may gradually be lowered over the deployment period so that at the end of 6 months the Scheme is invested in line with its asset allocation.

Investment in Triparty Repo Trades (TREPS) before the closure of NFO: The scheme may deploy the NFO proceeds in TREPS before the closure of NFO period. The appreciation received from investment in TREPS shall be passed on to investors. In case if the scheme is not able to garner the minimum subscription amount during the NFO period the interest earned upon investment of NFO proceeds in TREPS shall be returned to the investors, in proportion of their investments, along-with the refund of the subscription amount. The AMC shall not charge any investment management and advisory fees on funds deployed in TREPS during the NFO period.

Portfolio rebalancing/Changes in Investment Pattern: Subject to SEBI Regulations, the asset allocation pattern may change from time to time for a short term and for defensive considerations, keeping in view the market conditions/ applicable regulations/political & economic factors, the perception of the Investment Manager; the intention being at all times to seek to protect the interests of the Unit holders. Rebalancing across sectors and stocks shall be a dynamic exercise as this is crucial to performance.

The Fund Manager of the Scheme shall examine factors such as the overall macro-economic conditions, valuation levels, sector-specific factors, company-specific factors and trends in liquidity, to name a few, and reduce the equity exposure, if warranted, to lower levels and raise the fixed income component of the portfolio as a tactical call.

The Fund Manager shall seek to raise the equity exposure if the environment is conducive. This process of rebalancing may take place in a dynamic manner on a regular basis. Cash calls (with deployment in appropriate money-market and fixed-income securities), derivatives, changes in the degree of overweight and underweight to sectors and changes in allocation levels to stocks with varying attributes be used to balance the portfolio.

If the macro-economic conditions and market levels warrant, the fund manager may on an exceptional basis, reduce the equity exposure and raise the fixed-income component of the portfolio beyond the asset allocation boundary indicated in the table for normal circumstances. Such an allocation in exceptional circumstances shall be adopted with the approval of the Internal Investment Committee of Sundaram Asset Management.

In the event of deviations, the fund manager will carry out rebalancing within 30 days. Where the portfolio is not rebalanced within 30 days, justification for the same shall be placed before the Internal Investment Committee and reasons for the same shall be recorded in writing. The Internal Investment Committee of the Investment Manager, shall then decide on the course of action. However, at all times the portfolio will adhere to the overall investment objectives of the Scheme.

The Scheme aims to provide long term capital growth by investing in a well diversified portfolio of equity and equity related securities across market capitalization and sectors. The fund would aim to participate in the all-round growth of the economy. For this fund manager will identify suitable stocks that will benefit from economic growth. The fund may follow a bottom-up approach towards investing / identifying individual stocks and a top down approach towards investing / identifying sectors so that the resultant portfolio is well diversified. The Scheme would invest in companies based on various quantitative and qualitative criteria like sound financials, professional management, track record, industry scenario, industry and company growth prospects etc., The Fund Manager may also invest in overseas equities and ADR’s / GDR’s depending on the investment manager’s view / analysis.

To reduce the risk of portfolio, the Scheme may also use various derivative and hedging products from time to time for hedging and rebalancing purposes, in the manner permitted by SEBI. The Scheme retains the flexibility to hold from time to time relatively more concentrated investments in a few sectors or a concentrated portfolio of stocks. The fund also invests in fixed income/money market/cash and cash equivalents upto 35%.