The fund offers Section 54EA and 54EB benefits. During the initial subscription period, the fund carries a concessional sales load of 1 per cent and the ongoing sales after this period will carry a load of 2.25 per cent. The fund will not charge any exit load. Also, an annual recurring expense of 2.5 per cent of the daily average net assets will be charged to the scheme. Besides switch over option, the fund offers a unique feature of reinstatement privilege under which investors who have redeemed their units and want to re-enter the scheme within a month shall be reinstated in thescheme at the applicable NAV without any sales load. An investor in the scheme wanting to avoid an anticipated market downslide can conveniently take shelter in a safer alternative at little or no cost.

Alliance Capital AMC currently manages four domestic funds. The four domestic funds - Alliance '95, Alliance Capital Tax Relief, Alliance Liquid Income and Alliance Cash manager have a combined corpus of Rs 156 crore. Samir Arora will manage the fund. He has been the fund manager of Alliance '95 and Alliance Capital Tax Relief since launch.

Alliance '95: Alliance '95, a balanced fund, seeks capital appreciation and current income from a portfolio of equity and fixed income instruments. The fund offers dividend and growth plan. Till now, the fund has made two dividend payouts. In July, 1996, the fund paid a dividend of Rs 0.43 followed by Re 1 in March, 1998. Launched in January, 1995, the fund collected Rs 71 crore. In the first two years, the fund did not post any significant gains. The initialnon-performance is attributed to the fall of the IPO market where the fund was initially active. The fund has witnessed a turbulent equity market since launch and has lived with continuous redemption pressure.

The fund manager follows a top down approach while picking stocks. The equity component is predominantly deployed in aggressive growth stocks. The fund manager has adopted an active management style that looks for trading opportunities. The fund maintains a reasonable debt component.

Partially helped by appreciation in the value of its equity portfolio, the fund had a unjustifiable 75 per cent exposure to equities in June, 1997. Since then, the fund has slashed its equity exposure to 65 per cent. The debt component is of reasonable quality.

Alliance '95 was among the first funds to take an aggressive stance in the infotech sector. In the past two years, the fund has expanded exposure to this sector. Much before the infotech wave began, the fund had picked up NIIT, Infosys, Digital Equipment,Satyam Computers and HCL towards the fag end of 1995. In the past two quarters, the fund has been consolidating its holdings in this sector. The fund is gradually encashing its earlier buys and replacing them by second line companies in this sector.

Today, infotech sector commands one quarter of net assets. The second largest sector in the portfolio in FMCG (14 per cent) followed by media and pharmaceuticals. While the fund has fairly diversified bunch of FMCG and pharma stocks, it hold only one media scrip. Zee Telefilms, the only media scrip with the fund has been figuring in the portfolio since June, 1995. The fund has increased its position in the scrip from 15,000 shares in June, 1995 to 100,000 shares in June, 1998 and the holding currently accounts for 10 per cent of net assets.

The fund has completely withdrawn from the recession hit automobile and capital goods sector in the past quarters. The fund manager has also reduced exposure to the banking industry. Over time, the fund has completelyjettisoned its small-cap IPO stocks.

Alliance Capital Tax Relief: Alliance Capital Tax Relief, a tax planning scheme launched in 1996, seeks long term capital appreciation primarily through investment in equities. The ten-year, closed-ended fund managed to mobilise just about Rs 1 crore during the IPO. The fund has put up exemplary performance since launch. Except for the fact that the fund remains more than 95 per cent invested in equities at all times, the fund is managed exactly like Alliance '95.

Managed by the same fund manager, the stock selection strategy, the style of management and sectoral exposure is typically the same as that Alliance '95. Thanks to the expertise of the fund manager and of course the infotech boom, both the funds have emerged as top performers. In the past two years, Alliance Tax Relief has appreciated about 110 per cent and has been the top performer cutting across categories.

Alliance '95, despite being a balanced fund has been the second best, appreciating 97 percent during the same period.

Although Alliance '95 was a non-performer in the first two years, its recent performance more than compensates for the loss. Both these funds of Alliance have superior performance track record, in a brief period in which the markets have been highly volatile. However, Alliance '95 is less than four years old and has not been subjected to all moods of the market.

Though the fund manager is likely to adopt his tested strategy for Alliance Equity Fund, if the fund attracts a huge corpus, the fund manager may have to alter his strategy accordingly. As the state of the market looks today, the fund manager may find bargains at current valuations which will work in favour of the fund over time.

Backed by the performance numbers of the existing funds, the fund should prove to be a good bet for long-term investors, despite its volatility. The case for investment in the fund is all the more tempting in view of the market, which is at its low. However, investors with low appetite forrisk should stay away.

--Value Research