Ever since the fall of the Vajpayee government, the market has recovered sharply on the back of a smart increase in economy-related stocks, particularly cement and petrochemicals. infotech and pharma stocks, on the other hand, have shown a decelerating trend.

Although Top 200 Fund is largely insulated from shocks experienced by some other mutual funds which were overweight in infotech and pharma sectors, it has not benefited from the market rally because it has no major exposure to commodity stocks.

Over the last two months, the fund portfolio has been reshuffled with exposure to infotech and pharma stocks being trimmed in favour of consumer non-durables, telecom and auto/tyre sectors. With growth prospects in the power sector uncertain, the fund's weightage to this sectorhas also been reduced from around 8 per cent in December last to around 1 per cent.

Last month, the fund sold its entire holdings in Ranbaxy which had recorded sharp appreciation. Another significant disinvestment in May was Tata Infotech on expectations of a slowdown in fresh orders. As a result, the fund's weightage to infotech at the end of May 1999 came down to 11 per cent from 15 per cent on March 31, 1999. During the same period, exposure to pharma stocks fell from 19 per cent to 14 per cent.

The fund has increased exposure to Voltas and Cummins India and the fund manager expects the full benefit of the Voltas restructuring to be reflected in the quarter ending June 30, 1999. The fund manager believes that `the continued improvement in international commodity prices due to incremental demand from the economic recovery underway in Asia will benefit Indian commodity producers even if domestic volume growth is low.' ``Slack demand in the Indian economy itself will see a considerable lag time beforethese sectors start recovering. The cement sector will also witness a dampening of demand primarily on account of the monsoon season,'' he says.

The Top 200 Fund's performance over a slightly longer term of 1 year and above is still well above the growth registered by the benchmark index. Over the 12-month rolling period upto June 11, 1999, the fund grew by 37.9 per cent against 18 per cent growth in the BSE 200.