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Dhirendra Kumar
Zurich India Equity Fund (ZIEF), formerly Centurion Open-end, has made a major comeback in the recent past. The open-end growth fund was launched in December, 1994 during the primary market boom. And through the IPO boom to bust story, the fund initially outperformed the indices and then slipped on the performance charts, under-performing key equity benchmarks in the falling market since 1995.
A sizeable part of the fund's portfolio turned illiquid. At its worst, the fund's NAV fell to a low of Rs 5.15 in December, 1996. The fund started with a Rs 55 crore asset base but following its under-performance, it faced redemptions. Currently, Zurich India Equity Fund has Rs 26 crore under management.
Zurich India Mutual Fund manages four funds. These include ZIEF, Zurich India Prudence, an open-end balanced fund, Zurich India Quantum Growth Fund, a closed-end equity fund and Zurich India Tax Saver, a closed-end tax saving fund. While Zurich India Prudence has recently been converted into an open-end fund, theother two closed-end funds are likely to be converted soon into an open-end fund.
Meanwhile, the management control of the AMC underwent a change when the Swiss insurer, Zurich increased its stake. This was followed by a restructuring of the portfolio in December, 1996. The sustained re-alignment of the fund's portfolio over the past two years has translated into handsome performance numbers now. Currently, 95 per cent is invested into equities while the rest is in cash and equivalent.
The fund now has 35 per cent allocation to software, 25 per cent to consumer companies, 19 per cent to pharma and 9 per cent to automobiles. The fund is spread over 21 stocks with NIIT being the top bet accounting for 13 per cent of the portfolio, followed by 11 per cent in Infosys and 9 per cent in Hindustan Lever. The biggest holding in the pharma sector is in the Pfizer counter, accounting for 7 per cent of the fund's assets. Interestingly, the fund holds 5 lakh shares of Centurion Bank. The holding in Centurion Bank,an illiquid stock as the bank is yet to go public, has been valued at Rs 7.28 a share, aggregating Rs 36.40 lakh.
The fund's performance in the recent past has been inspiring. Over the past one year, the NAV has gained 55.95 per cent and 34.97 per cent over the previous two years, as on February 28, 1999. The fund ranks 3 over the past one and two years in the open-end equity fund category. Against the return generated by ZIEF, the open-End equity funds posted an average return of 24.40 per cent and 13.15 per cent over respective periods.
These performance numbers look all-the-more handsome because the NAV was at rock bottom levels two years ago. The fund has gained another 16.38 per cent in March with its NAV at Rs 12.36 as on March 30, 1999. Recently, the fund has dropped its 6 per cent load and is now available on a no-load basis. The investors, with medium to long term perspective and looking for aggressive growth should consider this fund. Investors of Zurich India Prudence Fund, seeking aggressivegrowth, should consider switching over to this fund.
Value Research
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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