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Fund Pick: Magnum Taxgain 93

Background

M agnum Taxgain Scheme '93, a tax-planning equity fund was initially launched as a closed-end fund and later converted into an open-ended fund in November 1999. The fund has till date declared two dividends --10% in March 1995 and 8% in March 1996.

Performance

The fund has given a total annualised return of 24.43% since launch. A large component of these returns was gained over the past one year. For the year ending November 30, 1999 the fund is up 210% against a 67% gain in Sensex. Magnum Taxgain launched in April 1993 is one of the few open-end tax saving equity fund which has been through a full market cycle. In the bull market of 1994, though the fund did not do as well as the Sensex but gained reasonably returning 77%. In the bear grip that followed to last till 1998, the fund lost all its gains. However, the fund was able to successfully guard its assets with its lowest NAV of Rs 9.84. However, from March 1998 onwards, the fund, on the back of major changes in the portfolio, has been outperforming the markets. The fund increased the equity exposure by 10% to 95% and also scaled down the number of stocks from 73 as on March 1998 to 25 as on October 1999. The portfolio complexion reflects a top-down approach of stock picking spread across 16 sectors with about 11 sectors represented by single stocks. No single sector has a lion's share in the portfolio. As on November 30, 1999, the top sectors constitute Software (25.59%), FMCG (12.57%) and Media (12.09%) of the assets. Besides a 16.6% exposure to the sector of Diversified Businesses, the fund also has moderate exposures to Spirits, Paper and Consumer Durables sectors. The fund with a quality portfolio that is well balanced between the growth and cyclical sectors, invests with a long-term perspective. S. Kumar's Synfab is one off-beat stock in the portfolio.

Outlook

The fund has declared a tax-free dividend of 25%, which can be availed of by the investors investing by December 15, 1999. Besides, the tax rebate of 20% and no load offer adds to the yield. However, investment made will have to be locked-in for a period of three years. Based on its diversified equity portfolio, the fund is expected to be deliver steady returns over long-term.

FUND BASICS
Objective	Size	NAV:10/12/99	Exit Price	Entry Price	Tot Ret
Taxplanning	133.58cr	34.79	34.79	34.79	24%
BENCHMARK COMPARISONS (%)					30/11/99
	1M	3M	6M	1Yr	3Yr
Fund	19.5	23.2	92.8	210.3	54.3
Sensex	4.4	-4.7	23.0	66.7	17.1
Nat. Index	3.9	2.7	37.0	80.5	20.4
Obj. Avg.	9.0	14.0	41.9	83.7	14.5
TOP HOLDINGS (30/11/99)			Mkt.Val(cr.)		Net Assets %
Software Solution Integrated			12.13		10.5
Infosys Technologies			11.55		10
Vikas Wsp			7.90		6.84
Ramco Industries			7.64		6.61
Mcdowell & Co.			7.59		6.57
Zee Telefilms			7.54		6.53
Sri Adhikari Brothers Television Network			6.42		5.56
Aftek Infosys			5.88		5.09
Tamil Nadu Newsprint & Papers			4.98		4.31
Grasim Industries			4.93		4.27

Mutual Funds

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