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February 9, 2000
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Fund Pick: Tata IT Fund
Background
The Tata IT Fund, earlier called the Tata Core Sector Fund, was launched as a seven-year close-ended scheme. In August 1999, it was converted into an open-ended scheme. The fund was launched with the objective of investing in the core sectors of the economy. However, the AMC changed the fund focus as an Infotech Fund to invest only in software stocks from December 28, 1999. The fund paid a 10 per cent dividend in September 1999.
Performance
This fund has given an annualised return of 35.35 per cent. Though it was initially able to invest in the falling markets, it went wrong in its view of an early economic recovery. After repeatedly recording negative figures and underperforming the markets by a wide margin, the fund gradually abandoned its core sector orientation.
Since April 1998, the fund has had a sectoral shift in favour of software and pharma scrips. The sectors which accounted for a mere 9 per cent and 11 per cent respectively in March 1998, accounted for a whopping 51 per cent and 45 per cent on September 30, 1999.
As on December 31, pharma has been pared to 11 per cent and software was augmented to 75 per cent of net assets. Since the restructuring, the fund has been way ahead of the markets gaining 246 per cent in the year ending December 31, 1999, and ranks third among six similar funds.
Outlook
With a bright outlook for the infotech sector, the fund will be able to return reasonable performance figures. However, the sharp focus in only one sector will make the fund susceptible to wild gyrations. The fund is not suitable for risk-averse investors who cannot stand high volatility. The fund is available at nil entry load but with effect from February 1, 2000, it charges an exit load of 2 per cent and 1 per cent for exits within three months and six months respectively.
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FUND BASICS |
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Objective |
Size |
NAV:27/1/2000 |
Exit Price |
Entry Price |
Tot Ret |
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Sector Fund |
53.02 cr |
26.54 |
26.54 |
26.54 |
35% |
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BENCHMARK COMPARISONS (%) |
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30/12/99 |
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1M |
3M |
6M |
1Yr |
3Yr |
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Fund |
30.4 |
62.6 |
140.3 |
246.0 |
45.8 |
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Sensex |
8.3 |
5.1 |
20.9 |
63.8 |
17.6 |
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Nat. Index |
16.5 |
18.6 |
46.6 |
93.1 |
24.4 |
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Obj. Avg. |
20.5 |
32.9 |
51.6 |
84.0 |
11.7 |
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Top Holdings (31/12/99) |
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Mkt.Val(cr.) |
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Net Asts (%) |
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Visualsoft ( I) |
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14.08 |
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27.32 |
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Sonata Software |
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6.49 |
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12.58 |
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Infosys Technologies |
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4.13 |
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8.02 |
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Satyam Computer Services |
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4.08 |
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7.91 |
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Hoechst Marion Roussel |
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2.85 |
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5.53 |
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P S I Data Systems |
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2.68 |
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5.19 |
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Himachal Futuristic |
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2.68 |
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5.19 |
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Zee Telefilms |
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2.25 |
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4.37 |
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Pentafour Software |
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2.14 |
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4.15 |
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Software Solutions |
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2.03 |
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3.94 |
Mutual Funds
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