NEWS
COLUMNISTS
STOCKS
MUTUAL FUNDS
TAX
INTERVIEW
REAL ESTATE
GOLD
CURRENCY

Fund Pick: ITC Top 200

Background

ITC Threadneedle's Top 200 an open-end fund seeks long-term capital appreciation from a portfolio of equity investments in the largest quoted Indian companies. Upto 95 per cent of the fund is deployed in equities drawn from the companies in the BSE-200 Index. Top 200 fund carries a 2 per cent entry load for all investment below Rs 1 crore and no-load for investment above Rs 1 crore. The fund has no exit load. The minimum investment in the fund is Rs 2000.

Performance

In its brief two-year history, Top 200 fund has been a steady performer. The fund has outperformed its benchmark index over most time periods. The focused portfolio strategy pursued by the fund has worked very well till now. However, the fund had a lean patch during the rally in the cyclical stocks as it was a late entrant in this sector. Further, in the free falling market between October 15, 1999 and November 1, 1999 the fund lost 17.5 per cent against a 13.7 per cent fall in the BSE-200 index. However, the scheme's overall performance till date, remains a healthy one. Since its launch, the fund is up 29.20 per cent p.a. against 10.41 per cent gain in the BSE 200. Over the past one year, as on October 29, 1999 the fund has gained 65 per cent ranks 22 among 35 open-end equity funds. The predefined universe of equity investment stated by its charter tilts the portfolio towards large-cap stocks. The fund as on 31st October was overweight on the sectors of Pharma (21%), FMCG (20%), Software (13.7%) and Auto (13.6%). The cyclical component constitutes 24 per cent of the net assets. The fund has freshly acquired the scrips of Satyam Computers, Ranbaxy and Tata Tea while exiting from TVS Suzuki. The fund's portfolio is spread over 32 stocks only. The fund remains 95 per cent invested in equities irrespective of market conditions.

Outlook

The fund should outperform its benchmark with the portfolio being a selection from the index constituents itself. The fund is unlikely to get into illiquid segment of the market, with its predefined equity universe. The fund also targets specific return for each stock in its portfolio, which is re-evaluated on achieving the target return. In a turbulent market, the fund looks like an ideal vehicle to seek equity exposure for the retail investors. However, in some special situation stocks, the fund may be constrained. Since the fund does not time the market and follows a buy-and-hold approach, the scheme may be a good bet for investors looking for returns over a 3-4 year horizon.

FUND BASICS
Objective	Size	NAV:5/11/99	Exit Price	Entry Price	Total Returns
Growth	109.48 Cr	21.73	21.73	22.16	29.20% pa
BENCHMARK COMPARISONS (%)					29/10/99
	1M	3M	6M	1Yr	3Yr
Fund	-10.5	2.1	27.9	65	28.7
Sensex	-6.7	-2.2	33.6	58	12
Nat. Index	-2.5	8.6	48.9	71.2	15.3
Obj. Avg.	-3.1	10.6	35.3	56.5	11.0
TOP HOLDINGS EQUITY (31/10/99)					Net Asset %
Infosys Tech					7.33
Hindustan Lever Limited					5.64
NIIT Ltd.					4.41
Dabur India Ltd.					4.29
McDowell					4.19
Telco					3.19
Gujarat Ambuja					3.89
Madras Cements					3.79
Nalco Ltd.					3.78
ITC Ltd.					3.74
Ranbaxy Lab					3.58
Sun Pharma Ltd.					3.19
Tata Tea					2.96
Hero Honda					2.92
E Merck Ltd.					2.89
Ashok Leyland					2.74
Hind Lever Chem Ltd.					2.72
Dr. Reddy's Lab					2.71
Rhone - Poulenc					2.52
Pfizer Ltd.					2.49

Mutual Funds

Tell us what you think of this feature