The Hindu Business Line : Magnum Midcap Fund

The year 2006 was not a great year for mid-cap stocks; along with small-caps, it bore the brunt of the market turmoil. The returns generated in the first few months of the last calendar year failed to sustain till the year-end.

But the momentum has picked up in the last six months, which has helped the midcaps attain the levels reached last May. Magnum Midcap's mandate is to invest in stocks with a Rs 200-2000 crore market cap.

Magnum Midcap invests in stocks above this threshold too and its corners 41 percent of the asset. Here is a look at how the Fund managed its portfolio in the quarter ended December 2006.

Industrial manufacturing, a major driver of the markets, continues to enjoy the fund's favour along with auto, cement, construction, energy, and metals. During the same period, the fund reduced its exposure to sectors such as consumer goods, services and textiles.

In the industrial manufacturing space, more shares of Crompton Greaves were added along with Bharati Shipyard and KEC Infrastructure. Opto Circuit and Elecon Engineering were retained without much change in the holding level. Exposure to SKF India was reduced. Kesoram Industries continues to occupy the top slot in the portfolio; exposure to the stock was enhanced during the quarter.

The fund increased exposure to small-caps Sagar Cement and Mangalam Cement.

The power sector is running at its peak load, thanks to brisk construction activity across the country. The fund, anticipating there is more steam left in the space, stepped up allocation to the sector. It accumulated Indo-Asian Fuse Gear, though GVK Power and Infrastructure was the lone stock to move out of portfolio.

The media and entertainment sector underwent a minor re- jig. Pruning exposure to Jagran Prakashan and Crest Communication, the fund stepped up holdings in Sri Adhikari Brothers and Adlabs Films.

The fund reduced exposure to consumer goods sector. With sugar prices looking weak, the fund preferred to reduce holdings in Rajshree Sugars and Dwarikesh Sugar.

The fund was launched in April 2005. Mr Sanjay Sinha manages the fund. The assets under management are Rs 347.4 crore.

Suresh Parthasarathy

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