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S. Vaidya Nathan

INVESTORS in the Zurich India Capital Builder Fund can contemplate paring exposures. The portfolio comprises stocks that have witnessed sharp spurts in the last month and a half. The cash position of about 13 per cent also provides a cushion to the NAV.

The fund's track record has not been too impressive — the odd one out in the Zurich stable (it is now part of HDFC Mutual Fund, which acquired Zurich's Indian mutual fund operations).

In the last five- and three-year periods, returns per annum were about 5 per cent and minus 5 per cent respectively. In the last six months, the NAV has been shored up. But a sizeable number of equity funds have outperformed Zurich India Capital Builder. Its portfolio increasingly resembles that of a typical diversified equity fund than one with a distinct defensive tilt. With the new portfolio profile, it may be better for investors to look at other options with a good track record.

Sister schemes such as Zurich India Equity, Zurich India Tax Saver and Zurich India Prudence with Bluechip and Prima of Franklin Templeton can figure at the top end of alternatives.

Suitability: The fund now has a risk profile that is similar to any diversified fund. But it may better to let it accumulate a track record of delivering decent returns.

It can no longer be used as a diversification option due to its earlier distinctive style of management and stock selection. Investors who stay in the scheme may be better off with the dividend option due to favourable tax status in 2003-04.

Portfolio status: The fund is diversified across a number of stocks with individual stock weights at a conservative 5-6 per cent. The sharp run-up in prices of Bharat Electronics, Siemens, Hindustan Lever, ITC and SBI have helped lift the NAV.

The fund continues to hold the traditional Zurich themes, such as Macmilllan, Tata Infomedia, Swaraj Mazda, Punjab Tractors and Cummins.

Fund facts: The scheme was launched by the 20th Century Mutual Fund in February 1994 and was subsequently taken over by Zurich. The minimum investment amount is Rs 1,000. The entry load is 2 per cent. There is no exit load. The asset base is Rs 28 crore.

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