NEWS
COLUMNISTS
STOCKS
MUTUAL FUNDS
TAX
INTERVIEW
REAL ESTATE
GOLD
CURRENCY

Fund Pick: Canpremium

Background

Canpremium is a conservative balanced fund, with larger allocation to debt. The fund will have up to 60 per cent exposure in fixed income securities and rest in equities. The fund launched in May'91, was originally a closed-end scheme targeted at institutional investors. It had, on the back of a promise to double the investments in five years, raised Rs 509 crore from 55 institutional investors. However, even after the redemption being extended by one year, the fund could not achieve the targeted returns. The fund finally gave the investors an exit option in February 1998 while converting Canpremium in to an open-ended fund and retained Rs 52 crore. The fund has given two dividends since its rollover -- of 6.5% in November 1998 and 6% in July 1999.

Performance

The fund is perhaps the only open-end balanced fund with a dominant debt allocation. In March 1998 the fund had only 10 per cent exposure to equities. However, the fund has since February 1999 gradually maintained 70:30 allocation to debt and equity. Notwithstanding the downsizing, the debt portfolio acquired at a time when interests rate were ruling high has largely been static. As a result the returns are relatively on a higher side in the range of 13-17%.

The fund has since November 1998 been overweight on the sectors of FMCG, Pharma and Infotech. Out of the Rs 20 crore exposure in the equity these sectors as on 30th October account for 26%, 17% and 32% respectively. Oil &Gas is the next most prominent sector comprising 6.5% of the equity besides nominal exposure in other cyclical scrips. The fund has in its open-end avatar returned an annualised return of 22.08% and in the past one year 21.07% as on October 29, 1999. Because of its conservative equity allocation the fund is a laggard amongst peers ranking #11 among 13 open-end balanced funds.

Outlook

The fund has a quality and large cap equity portfolio with limited downside. However, if the high yielding quality debt instruments come up for redemption it may not be easily substituted with papers of the same kind. Nevertheless, the fund is suited for a fixed-return investor seeking higher returns than bond funds without assuming any significant risk.

FUND BASICS
Objective	Size	NAV:23/11/99	Exit Price	Entry Price	Total Returns
Balanced	55.43 Cr	12.05	12.05	12.17	22.08% pa
BENCHMARK COMPARISONS (%)					29/10/99
	1M	3M	6M	1Yr	3Yr
Fund	-2.9	0.9	9.3	21.1	NA
Sensex	-0.8	6.0	27.9	43.0	NA
Nat. Index	-2.9	0.7	20.2	36.5	NA
Obj. Avg.	-1.0	4.5	14.3	23.5	9.6
TOP HOLDINGS EQUITY (30/09/99)			Mkt. Value (Cr)		Net Assets %
NIIT			2.82		5.1
Hindustan Lever			2.56		4.63
Ranbaxy Laboratories			1.34		2.42
Nestle India			1.28		2.31
Pentafour Software			1.20		2.17
Glaxo India			1.00		1.81
Aptech			0.85		1.54
ITC			0.74		1.34
MTNL			0.70		1.26
SmithKline Beecham Consumer			0.69		1.25

Mutual Funds

Tell us what you think of this feature