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Fund Pick: Zurich India Quantum Growth Fund

Background

Zurich India Quantum Growth Fund (ZIQGF) is a six-year closed-end equity fund. The fund is due for redemption on January 31, 2000 when it is likely to be converted into an open-end fund. The fund was launched before the 1994 boom. In the first year of lauch ithe fund performed well with its NAV appreciating by 33 per cent in less than a year. However, in the prolonged bear phase, the fund retraced almost 50 per cent of its value. To the original investor the fund has returned a mere 7.6 per cent till date.

Performance

Following the acquisition of a majority stake by Zurich Insurance in the AMC, the fund managers revamped the portfolio completely in favour of stocks, which enjoy the market fancy. The fund started gaining ground from the last quarter of 1998 and with the market surge, in calendar 1999 the fund is up 69% year to date ranking #5 out of 20 closed-end funds. The portfolio of the fund, as on September 30, 1999, is well diversified over the sectors of Fast Moving Consumer Goods (24%), Automobiles (18%), Pharma & Agrochemicals (12%), Financial Services (12%), Engineering (7%), Publishing and Printing (7%), Hotels and Tourism (7%), Software (6%) and Oil & Gas (2.5%). However, the fund has over the past 9 months significantly downsized its exposure in the sectors of Pharma, Software and Engineering. As a result in the last 3 months, even though the fund outperformed the benchmark BSE Sensex, it could not keep pace with its peers both in the open-end and closed-end categories.

Outlook

The fund with-its quality large-cap stock portfolio is poised for solid steady returns. Investment in the fund has little downside with the market rally gaining breadth. The fund trades infrequently and the last traded price on October 1 was Rs 12.30 against its NAV of Rs 15. Buying ZIQGF now will translate into a 22 per cent yield in 16 weeks when it redeems in January 2000.

FUND BASICS
Objective	Size (Rs. Crore)	Prem/Disc(%)	Mkt Price: 01/10/99	NAV: 13/10/99	Total Returns
Growth	102.6 cr	-0.18	12.30	15.20	7.62%
BENCHMARK COMPARISONS (%)					30/9/99
	1M	3M	6M	1Yr	3Yr
Fund	-2.1	19.8	17.8	69.5	31.5
Sensex	-2.9	15.1	27.4	47.8	13.5
Nat. Index	0.7	23.6	34.0	55.4	14.9
Obj. Avg.	4.9	24.1	22.2	49.5	9.9
Top Holdings (30/9/99)					Net Asset (%)
Hindustan Lever					8.48
Pfizer					4.74
Himatsingka Seide					3.94
Pidilite Industries					3.56
Procter & Gamble					3.33
Punjab Tractors					3.11
Glaxo India					3.04
Swaraj Engines					2.93
Swaraj Mazda					2.93
TELCO					2.66
HDFC					2.49
Cipla					2.28
Ucal Fuel Systems					2.23
Ashok Leyland					2.10
Motor Industries Co.					1.88
Hoechst Marion Roussel					1.68
Indian Shaving Products					1.58
Bajaj Auto					1.55
Kodak India					1.50
Archies Greetings					1.23

Mutual Funds

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