KPMF hikes cash exposure in seven schemes in July

Jai Kumar NR

New Delhi, Aug 14: Kothari Pioneer Mutual Fund (KPMF) has increased its cash exposure in seven equity-linked funds by whopping Rs 34.57 crore during the month of July. The sharp spurt in the liquid position seems to be the fallout of the fact that the equity market has lost its direction.

The schemes like Bluechip, Prima Fund, Taxshield, Internet Opportunities, Pharma Fund, Balanced Fund and Pension Fund have increased their cash exposure by almost 17-77 per cent in July, 2001.

The flagship equity scheme of KPMF, Bluechip has increased its cash position by Rs 16.84 crore (76.89 per cent), from Rs 21.9 crore in June to Rs 38.74 crore in July. Of the total assets of Rs 251.27 crore of Bluechip as on July 31, 15.42 per cent is kept in the liquid form. Another equity fund, Prima Fund has 26.06 per cent of its corpus in cash and its liquid position increased by 47 per cent, from Rs 3.44 crore to Rs 5 crore.

Taxshield, an equity linked savings scheme, has kept 14.92 per cent of its corpus in liquid, which has increased from Rs 7.92 crore to Rs 10.96 crore, a 38 per cent jump in just one month.

The sector-specific pharma fund has seen a 62.26 per cent spurt in its cash position from Rs 53 lakh to Rs 86 lakh. Its balanced fund has seen a rise of almost 56 per cent, from Rs 12.22 crore to Rs 19 crore. Internet Opportunities and Pension Plan have also seen a spurt of 17 per cent and 26 per cent respectively in their liquid position.

According to Value Research CEO Dhirendra Kumar, “The rising cash position of equity funds clearly points to a cautious approach towards the stock market. A consensus is building that equity is headed nowhere.”

However, the increase in KPMF’s cash position does not seem point towards any redemption pressure. “This does not indicate the preparedness for facing any redemption pressure. Currently, there is hardly any redemption pressure in equity funds,” Mr Kumar adds.
During the month, KPMF has also churned its portfolio by reducing its overall exposure to the infotech sector and there seems to be a marginal tilt towards top-rung software companies. The fund has reduced its exposure to this sector (excluding the investments of Internet Opportunity and Infotech Fund) from Rs 123 crore as on June 30 to Rs 107.65 crore as on July 31. A marginal change in the investment value is also because of a rise/fall in the software stocks under its portfolio. Thanks to some defensive buying in FMCG stocks in July, KPMF has also increased its exposure to this sector.