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Suresh Krishnamurthy

UNITHOLDERS in GIC Fortune '94 may consider paring their exposures in it and switch to a fund with a better performance record. The fund's NAV has run up sharply on the back of investment interest in stocks of public sector companies. Given that the fund's overall performance record has been poor, investors can use the opportunity to exit.

Suitability: The investment objective is long-term capital appreciation. As such, ideally, only investors with the wherewithal to hold for the long term should consider staying invested in the fund. However, the performance since its launch in December 1994 has been unimpressive. The fund is thus not suitable for investors whose exposure to equity is only or predominantly through this fund.

Performance: The performance since September 2001 and, in particular, since December 2001 has been spectacular. The NAV per unit has appreciated around 30 per cent since then, outperforming both its peers and the benchmark indices. However, the long-term performance has been poor. The fund's present NAV of Rs 6.35 indicates the depreciation in value since its launch in end-1994. The fund also did not take advantage of the rally in prices between March 1999 and February 2000. In addition, the performance in 2000 and 2001 has lagged that of the Nifty.

Portfolio: At the end of January 2001, the fund was almost fully invested with the cash position at around 5.30 per cent of the net assets. In terms of exposures to sectors, refineries topped the portfolio with 18.1 per cent, followed by information technology at 14.1 per cent. Interestingly, there is no exposure to consumer goods and little to healthcare.

In terms of stocks, the focus is on public sector companies. HPCL, MTNL, GAIL, Engineers India, SBI and IOC accounted for 33 per cent of net assets at the end of January 2001. In the infotech sector, the major exposures are in Infosys, Satyam and HCL Technologies. The fund also has significant exposure to stocks such as Hindalco, L&T and BSES.

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