The growth fund was launched as a close-end scheme in April 1997 and had a corpus of Rs 11 crore. It became open-end on February 19, 1999. but the corpus has grown by only Rs 1 crore since then. This, despite a significant change in investor attitude towards investing in growth schemes of mutual funds. With many first time investors likely to test the growth schemes, particularly after the announcement of fiscal benefits by the government, the fund now wants to project its growth scheme as a very safe investment option.

``We have have consciously preferred to have adiversified portfolio as it contains risks on a longer horizon. In four to five year's time, the returns offered by a diversified fund will be more or less equal to that of a concentrated fund,'' says T P Raman, managing director, Sundaram Newton Asset Management Company.

He also pointed out that many funds which were bullish on IT, pharma and FMCG stocks and saw significant appreciation in their net asset value (NAVs) are presently experiencing a significant decline in their NAVs. Many investors are not in a position to bear this short-term losses and it is for such people that a diversified fund will be ideal, he added.

Till May 1999, the funds' highest exposure was to the consumer goods sector (to the tune of 25 per cent of its portfolio). The auto industry, IT, cement, healthcare, oil & gas formed a part of this portfolio. The fund has posted a 43 per cent growth since its launch and its NAV currently stands at Rs 14.

The fund, which predominantly has only retail investors, is planning to makefurther inroads into the retail segment. It recently introduced a systematic investment plan whereby an investor initially puts in Rs 2000 and then invests in multiples of Rs 500. The fund is also beefing up its presence in all major mutual fund mobilisation centres. It has posted its personnel in places like Delhi, Mumbai, Hyderabad, Bangalore.

By conveying to people that its defensive fund is the ideal investment option over a longer period of time, the fund is hopful of capitalising on the TVS group's philosophy of conservatism.