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Fund Pick: K-30

Background

K-30, an open-end equity fund seeks capital appreciation by investing predominantly in equity of not more than 30 companies. Importantly this is not an index fund that will invest in the 30-share sensex of the BSE with which people often confuse this fund. This fund will invest in any 30 scrips at any point in time. The fund will be invested nearly 90 per cent in equities and the rest in debt and money market instruments. The fund is available to investors with an entry load of 1.5 per cent.

Performance

The fund since its launch, in December 1998 has given an annualised return of 135% as against 65.30% by BSE Sensex and 71% by S&P CNX Nifty. Launched at the time of the rally in the Infotech, Pharma and FMCG sectors, the fund was overweight on them. In the initial six months these sectors accounted for around 70-75% and subsequently 55-65% reflecting a greater shift towards cyclicals. As a result the fund displayed spectacular performance returning 46 per cent in the first quarter ending June 1999. However, the fund missed the cyclical rally during the quarter ending June 1999 and posted a negative return of 4.4 per cent against a gain of 10.7 per cent in the Sensex. In recent months, the fund has reduced its exposure to Pharma and FMCG stocks in favour of Infotech, Media and Cement sectors. This shift has helped the fund to bounce back. During the three months ending 29th October 1999, the fund gained 16.6 per cent. Ranking 14 among 38 of its like while the Sensex posted -2.15 per cent return. Infosys and HLL have since launch and till September end held the top 2 slots in its portfolio accounting for 18-22 per cent of the assets. The fund has concentrated bets spread over 30 stocks, diversified across sectors and picked up with a long-term perspective. The fund holds modest holdings in the sectors of Automotives, Petroleum and Engineering. Interestingly, the funds portfolio has two offbeat holdings in International Best Foods and LGB Brothers.

Outlook

The fund has declared a dividend of 20 per cent with the record date of December11 1999. However, the fund would be charging a 1.5 per cent exit load for new investors till February 29, 2000. This load is apart from the already existing entry load of 1.5 per cent. The fund is actively managed with low portfolio turnover. It has a good balance of a quality and diversified portfolio with focus on long-term capital appreciation. K 30 could be a good long-term investment.

FUND BASICS
Objective	Size	NAV:25/11/99	Exit Price	Entry Price	Total Returns
Growth	38.88 Cr	20.73	20.73	21.04	135 % pa
BENCHMARK COMPARISONS (%)					29/10/99
	1M	3M	6M	1Yr	3Yr
Fund	-3.8	16.6	39.6	N.A.	N.A.
Sensex	-6.7	-2.2	33.6	N.A.	NA
Nat. Index	-2.5	8.6	48.9	N.A.	NA
Obj. Avg.	-3.0	10.5	34.9	55.8	10.9
TOP HOLDINGS EQUITY (19/11/99)					Net Assets %
Infosys Technologies					12.35
Zee Telefilms					7.76
HLL					6.19
Satyam Computer					5.81
Mahindra & Mahindra					3.92
Larsen & Toubro					3.72
Hughes Software					3.27
Citicorp Securities & Inv.					3.13
Indian Shaving Products					3.08
Cadbury India					2.88

Mutual Funds

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