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Fund Pick: Canpep '93

Background

C anpep '93 was initially launched as a tax-planning equity closed-end fund. It was converted into an open-end find in May 1999. The fund has given four dividends in its history -- 15% in 1994, 12.5% in 1995, 14% in 1996 and 12.5% in July 1999. The fund is available to investors on a no load basis.

Performance

The fund since its launch has given an annualised total return of 19.87%. And in a rising market over the past one-year ending November 30 1999, the fund is up 126%. Canpep '93 is the only open-end tax planning fund which has been through a full market cycle. The fund gained significantly in the bull market of 1994 returning 136% and outperforming the Sensex by a wide margin of 51%. However, mid-way through the bearish grip, that lasted till 1998 it lost almost half its asset base. Despite, the brief upside during the 1996 rally, the loss was twice as much the loss in the benchmark. The fund bounced back beginning 1997, though outplayed the sensex only from September 1997. Nevertheless, the fund managed to guard its assets even in the worst phase of the markets. The fund despite, the large cap orientation, was, till March 1998, too much diversified and loaded with cyclical scrips. The portfolio recast reduced the number of holdings and took refuge in the growth sectors of software, Pharma and FMCG. As on September 30, 1999 these sectors comprised of 87% (up from 70% in March 1999) with software accounting for a lion's share of 53%. Besides, the portfolio is heavily concentrated in top 10 stocks accounting for 69% of net assets. The scrip of Infosys has featured at the top position for now around 4 years. The fund invests with a long term perspective and has a low portfolio turnover. Though the fund has over the past one year performed commendably, it has, however, lagged behind its peers.

Outlook

Given its complexion today, Canpep '93 is tax saving infotech fund. Given the bright outlook for the sector and select stocks therein, the fund is suited for investors with appetite for a volatile fund. The three-year lock-in will mitigate the volatility. The fund is also attractive for the tax rebate and zero load.

FUND BASICS
Objective	Size	NAV:9/12/99	Exit Price	Entry Price	Total Returns
Tax Planning	17.58 Cr	23.66	23.66	23.66	20% pa
BENCHMARK COMPARISONS (%)					30/11/99
	1M	3M	6M	1Yr	3Yr
Fund	16.8	18.6	55.2	126.4	39.9
Sensex	4.0	-5.8	16.6	63.6	17.2
Nat. Index	4.4	2.5	31.5	78.9	20.8
Obj. Avg.	9.0	14.0	41.9	83.7	14.5
TOP HOLDINGS (30/09/99)			Value (Cr)		Net Assets %
Infosys Technologies			5.35		35.57
Hindustan Lever			1.92		12.77
NIIT			1.41		9.38
Glaxo India			0.7		4.65
ITC			0.57		3.79
Ranbaxy Laboratories			0.52		3.46
Associated Cement Cos.			0.52		3.46
Smithkline Beecham Consumer			0.48		3.19
Pentafour Software			0.48		3.19
Hindustan Petroleum Corpn.			0.43		2.86

Mutual Funds

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