Incidentally, this is the unfortunate trend witnessed with most other mutualfunds during the period where the erosion in the balanced and growth fundshave tended to converge largely because of the concentration of equity inthe convergence sectors.

Balanced funds are ideally meant for investors who do not want to take theextra risks of a growth fund. This purpose is achieved with a judiciousmix of debt and equity in a balanced fund which is normally in theproportion of around 40:60.

The portfolio of the SBI Magnum Balanced Fund shows a debt:equity componentof about 25:75. On the other hand, as much as 64 per cent of the equityinvestments was concentrated in software, media and telecom sectors.

These are the sectors which took the brunt of selling pressure and as aresult the net assets of the balanced fund fell from Rs 290 crore on April1, 2000 to Rs 176 crore and its NAV fell during the period from Rs 25.25 toRs 15.59.

The managing director of SBI Funds Management Ltd, Niamatullah, said hisfund had not altered the weightages significantly despite the sharp erosionin values. He added that there were marginal drop in inflows into the equityschemes during the last couple of months but mobilisation in the incomescheme was largely unaffected.

Niamatullah also denied that there was any exodus of substance from the fundin recent times and was normal. KG Ravindran, general manager, Chennaibranch of SBI has joined recently the fund as executive vice president incharge of operations, customer service, product development, marketing,corporate affairs and compliance.

The top five equity holdings of the balanced fund on May 1, 2000 includedSSI, Aftek Infosys, Zee Telefilms, Ramco Systems and Himachal Futuristic allof which fell by an average of over 40 per cent during the period.

In comparison, its Magnum Equity Fund suffered an erosion in assets of 41per cent in the month to May 1, 2000 from Rs 327 crore to Rs 194 crore.exposure to the convergence sectors on May 1 was 58 per cent and the topfive holdings comprised SSI, Zee Telefilms, Satyam Computer, Shyam Telecomand DSQ Software.