Prudential ICICI Growth: Hold

Recommendation: Hold

Aarati Krishnan

DIVERSIFICATION has been the key feature of the portfolio strategy adopted by the Prudential ICICI Growth Fund.

The fund has consistently kept both its stock-specific and sector-specific weightages within pre-determined limits, relative to the market index.

Since December 1999, the returns on this fund have been lower than other diversified funds such as Kothari Pioneer Bluechip and Alliance Equity Fund, which follow more focussed strategies. The portfolio of this fund features a mix of mid-sized and large technology companies. The diversified strategy and the sharp setback to small and mid-sized IT companies appears to have undermined the perforamnce this year.

The fund discloses only the top ten holdings on a monthly basis; full portfolio disclosure is restricted to the quarterly reports. The following changes took place in the top holdings between September 29 and October 31:

Stocks added: The fund added to its holdings in Wipro, ITC, Global Telesystems and SSI during this month. While Wipro, SSI and Global Telesystems have seen a decline in price over this period, ITC has seen an appreciation in price.

Stocks reduced: The fund appears to have liquidated part of its holdings in Reliance Industries, Dr. Reddy's Labs, Himachal Futuristic and Satyam Computers.

Sector allocations: Sector allocations of the fund have not changed much as a result of these transactions. The fund continued to have a 33 per cent exposure in software stocks by October 31 (31.5 per cent at end-September), with telecom and media accounting for 17.9 per cent (17.23 per cent). Consumer products at 11.94 per cent is the second largest weightage (11.56 per cent), with the rest of exposures spread between diverse sectors such as cement, chemicals, finance, healthcare, oil and gas and metals.

Concentration: The degree of concentration in the top ten holdings is low at 54.42 per cent, but this is practically unchanged from 53 per cent at end-September.

This column tracks recent changes in the top exposures of various mutual funds. The latest available portfolio is compared with that of the preceding month/quarter.