Kothari Pioneer Taxshield: Invest

Recommendation: Invest

S. Vaidya Nathan

TAXSHIELD, the open-end tax saving scheme launched by Kothari Pioneer Mutual Fund in 1999, has turned in an impressive performance so far. The fund has had two burst of significant accretion to its corpus, on the back of two divided payouts.

The inflows have altered the scale of the scheme, from one with an asset base of less than Rs 15 crore in early 2000 to one with an asset base of Rs 70.17 crore as of November 2000. After staying with a lot of cash for much of 2000, the fund is now invested in equities to the extent of 80 per cent of its net assets. A scrutiny of the portfolio of Taxshield between October and November shows the following changes:

Stocks acquired: The fund bought in into quite a few old economy (especially stocks of economically sensitive companies) and finance stocks in November. It acquired stocks such as TISCO, Gas Authority of India (GAIL), IPCL, Videsh Sanchar Nigam Ltd (VSNL), IDBI Bank, HDFC Bank, Dabur and Dr. Reddy's Laboratories.

Enhanced exposures: The fund added to its exposures in Punjab Tractors and Hindalco.

Stocks sold: The fund cut exposures in three technology stocks -- BFL Software, Hughes Software and completely in SSI.

Top holdings: The top ten holdings of the fund are Infosys Technologies, HCL Technologies, Polaris Software, Satyam Computer, Sonata Software, Mastek, ITC, Television Eighteen, Hoechst Marion Roussel and Raymond.

Top sectoral exposures: The fund has close to 35.52 per cent of its assets in information technology, 9.53 per cent in FMCG, 5.58 per cent in Metals, 5.14 per cent in diversified stocks, 4.63 per cent in hospitality and entertainment, 4.45 per cent in healthcare., 3.22 per cent in automobiles and 3.22 per cent in the finance sector.

The fund has been fairly actively managed and is now invested in fundamentally sound stocks in various sectors. From a long-term point of view, the portfolio appears well-structured now to deliver above-average returns. Fresh investments can be contemplated, done in a phased manner over a period of time and investors can choose the dividend option.

Fund facts: The fund was launched in April 1999. It offers entry at a maximum load of 1 per cent. The fund manager is Mr Ravi Mehrotra. The NAV of the dividend option is Rs 13.25 per unit and that of the growth option, Rs 25.13 per unit.

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.