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Sunday, July 29, 2001












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Kothari Pioneer Taxshield: Hold

Recommendation: Hold

Aarati Krishnan

INVESTORS in Kothari Pioneer Taxshield can hold their investments in the fund for now, despite its being overweight on technology stocks.

Given the present uncertainties on the earnings prospects of tech stocks, this could make for a higher-than-average risk profile.

However, the fund would be in a good position to capitalise on any bounce-back in technology stocks. Given its sectoral allocation pattern, the fund is suitable for investors with an above-average appetite for risk. It is actively managed. The following changes were made in the portfolio between May 31 and June 30:

Stocks added: Nirma was the sole new addition during the month.

Stocks sold: The fund completely liquidated holdings in HDFC, SBI, Mastek and Raymond Woollen.

Holdings enhanced: The fund enhanced its holdings in Hero Honda, Indo Gulf, Grasim, Cipla, Indian Hotels, HCL Technologies, Hughes Software, BPCL, and Cummins India.

Holdings pared: The fund pared exposures in Hindalco.

Sectoral exposures: After the above changes, the fund's allocation to IT stocks declined marginally from 27 per cent to 29 per cent. Healthcare (for which exposures have gone up from 8.5 per cent to 10.7 per cent), FMCG (5.8 per cent to 8 per cent), have seen increased allocations.

The fund cut exposures to banking (10.5 per cent to 9.6 per cent), metals (8.5 per cent to 7.9 per cent), telecom (6 per cent to 5.8 per cent). It chose to retain a lower proportion of net assets in cash. The exposure to cash equivalents has down from 13.13 per cent to 10.3 per cent during this period.

Fund facts: Kothari Pioneer Taxshield is an open-end fund launched in April 1999. Starting off with a very high technology stock allocation, the fund acquired a more diversified profile since mid-2000.

It is a tax saving fund, with investments in it qualifying for a 20 per cent tax rebate under Section 88 of the Income-Tax Act. Investments carry the mandatory 3-year lock-in period. The fund charges a maximum entry load of 1 per cent. It is managed by Mr Ravi Mehrotra.

(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.)


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