The fund will be almost fully invested in infotech stocks and on occasions, maintain high liquidity with investments in money markets. When possible, the fund can also invest a maximum of 30 per cent of its corpus in overseas markets. KP Infotech Fund will be actively managed, and will assume defensive or aggressive position on infotech stocks depending on opportunities available at various points in time. On defensive consideration, the scheme may invest substantially in money market instruments. The portfolio turnover is expected to be between 50 and 100 per cent.

Launched in August, 1998, the fund collected Rs 8 crore. The fund was sold at a initial load of 3 per cent and hence the NAV started from Rs 9.70. In the short span since inception, the fund has posted a return of 3.51 per cent. In the past one monthending October 31, 1998, the fund has depreciated by 1.86 per cent. The fund has managed to outperform its benchmark as well as the broad market index. Less than three months since launch, the fund manager has already built a complete portfolio. 80 per cent of the fund is deployed in equities of infotech companies. The rest is in money market instruments. The nine stocks in the KP infotech portfolio have posted better than expected results and are likely to continue their superior performance. The history of the fund is too short to comment on its performance. However, in the light of the growth potential of the IT sector, the fund must perform well. The right mix of industry leaders and emerging winners will hold the key to the fund's performance. Fund managers at KP have been aggressive investors in this sector ever since its potential was recognised by the market and have been great beneficiaries of the same. Their experience should work in the favour of the fund. Apart from the merits of the infotechsector itself, the fund will carry the features typical of sectoral funds. As a narrowly focussed sectoral fund, it can not provide a broad diversification. The fund is likely to be more volatile than a broad diversified portfolio and the market. The fund also provides the convenience of owning a diversified portfolio of IT stocks for a minimum investment of Rs 2000. The fund carries a sales load of 3 per cent. KP Infotech Fund is the ideal vehicle for retail investors bullish on the IT sector.