Internet Opportunities: Hold

Recommendation: Hold

S. Vaidya Nathan

INVESTORS in the Pioneer ITI (erstwhile Kothari Pioneer) Internet Opportunities Fund can stay invested for the present.

Though quite a few of the holdings seem stiffly valued, there may be a better value across the portfolio when the market recovers. The fund is well-diversified, with a well spread out portfolio. The following are the changes in the portfolio in July 2001:

New stocks: the fund acquired the American Depository Receipts of HDFC Bank. This adds to the already sizeable exposure that the Internet Opportunities Fund has to the HDFC Bank stock.

Stocks cut: The fund has not sold out completely on any of its holdings. It continues to maintain a fairly stable portfolio in terms of stocks and has only made marginal changes in recent months.

Enhanced exposures: The fund appears to have taken a liking for the petrochem/oil sector. Three of its enhanced exposures in July were from this sector _ Reliance Industries, Bharat Petroleum (BPCL) and Gas Authority of India (GAIL).

Pared exposures: The fund cut exposures in HDFC, Wipro and Polaris Software. In each of these cases, the levels have been lowered sharply.

Cash position: The fund raised the cash position amidst some redemption. This suggests that the sale proceeds of the three stocks where exposures were cut have not been fully deployed back in equity. The cash/cash equivalents position moved up to 16.16 per cent of net assets (Rs 233.66 crore) at end July from 13.11 per cent (Rs 32.31 crore) at end June.

Fund flows: The fund saw some outflows in July. This is evident from the 4.83 per cent decline in the NAV and the 5.33 per cent decline in net assets. Sectoral exposures are barely changed with only a marginal paring of exposures in finance and information technology sector and a hike in oil/petrochem share.

Top ten exposures: The top ten holdings of the fund are Infosys, Hughes Software, HDFC Bank, HCL Technologies, Wipro, Reliance Industries, ICICI, BPCL, Digital GlobalSoft and VSNL. However cash/cash equivalents are higher than the top weighted stock, Infosys (15.87 per cent of net assets).

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.