The first dedicated gilts fund, K-Gilt has already gone open-end and has a current NAV of Rs 10.06. K-Gilt had mopped up close to Rs 100 crore during its initial offer while K-30 had seen an inflow of Rs 8 crore.

The current NAV of K-30 is inching towards Rs 11. The fund is primarily invested in the three defensive sectors of information technology, pharma and fast-moving consumer goods.

The fund currently has a 90 per cent exposure to equities while the rest is held in cash and money market instruments.

An NAV of Rs 11 on January 21 will translate into a return of 10 per cent in a month's time. However, on redemption, the fund will levy a contingentdeferred sales charge of 3 per cent since investments have been made for less than one year.

The fund has benefited from the rally on the bourses, which has seen the Sensex rise by more than 400 points from December 31. In fact, the sensex managed to scale the 3500-barrier (intra-day) on January 11.

K-30 currently holds 23 stocks in its portfolio. As per the offer document of the scheme, ``the portfolio will not comprise equity of more than 30 companies as greater number of investments do not necessarily result in either superior returns or significant reduction of risk.'' The performance of the portfolio is likely to be benchmarked against the BSE Sensex and NSE Fifty Index or Nifty.

The top holding of the fund is Hindustan Lever. Other investments include scrips like Infosys, Britannia, Smithkline Beecham Pharma and Pfizer. ``Although IT sector is performing well, we are looking for select companies that can continue to give decent returns and maintain a good growth rate even after Y2K or Europrojects are over,'' said Shekhar Sathe, CEO, Kotak Mahindra AMC.

Sathe, however, believes that the listing of Sonata Software at a hefty premium to its offer price may not see IT companies rsuhing to the IPO market.

``I do not see IT companies tapping the market in a big way simply because intellectual capital is the real asset with IT companies. They are not setting up huge projects for which they need to mobilise money,'' he added.

Sathe sees long-term potential in the pharma sector. ``It is not only the MNCs which will benefit from the implementation of the amendments to the Patents Bill.

We have Indian MNCs in the pharma sector like Ranbaxy and Dr Reddy's which will also be placed in an advantageous position,'' he said.