The Hindu Business Line : Principal Focussed Advantage: Auto, energy added

Between February and April 2006 the assets of Principal Focussed Advantage Fund hovered around Rs 120 crore. The top 10 holdings in the portfolio accounted for about 34 per cent of the assets.

During this period, the fund pruned its holding in sectors such as banking, financial services and software, and substantially increased exposure in consumer goods, auto and energy.

Improved commercial vehicle sales outlook on the back of the ban on overloading of vehicles may have prompted the fund to add Tata Motors and Ashok Leyland. It also increased the exposure in automotive ancillary stocks Talbros Automotive Components and Punjab Tractors. Frontline two-wheeler company Hero Honda, however, underwent pruning.

In the banking and financial service space, frontline stocks SBI and HDFC Bank made an exit. ICICI Bank, which lost favour with a number of funds during this period, was also sold. It also decreased its exposure to UTI Bank and Punjab National Bank. The fund, instead, entered non-banking financial plays such as Srei Infrastructure and M&M Financial services.

The energy sector also under went some rejig. While Rain Calcining was added, exposure to ONGC, Reliance Industries and Reliance Energy was increased despite lacklustre returns over the past few quarters. Power generation company CESC was axed.

Prominent IT stocks such as Satyam Computer services, HCL Technologies, HCL Infosystems, and TCS moved out completely. Although exposure to Subex System was pruned, it remained in the top ten stocks. KPIT Cummins Infosystem found a place in the fund.

The engineering sector was viewed with caution. The fund booked profits in BHEL, Crompton Greaves, Greaves Cotton, KEC Infrastructure, KEI Industries, and Larsen and Toubro.

Consumer goods found favour on the back of improved rural spending. Holdings in the segment almost doubled over the above period. EID Parry and Gitanjali Gems were added while ITC, Glaxo SmithKline Consumer, Balrampur Chini, and Hindustan Lever underwent partial profit booking.

Fund facts: Principal Focussed Advantage Fund was launched in March 2005.The Fund's objective is to invest in six dynamic sectors and select promising stocks within them. Mr Shyam Bhat manages the fund.

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