Birla IT Fund: Long on call - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Birla IT Fund: Long on call

May 12, 2001

Birla IT Fund has performed dismally over the past 12 months (down 42%), in line with other technology funds. The funds current net asset value (NAV) is just below Rs 9.0.

The chart above reveals the amazing turnaround that has taken place in the investment philosophy of Birla IT fund. Being a technology fund, Birla IT should be having a significant exposure to technology sector. However, its exposure to IT has slumped from 78% in the month of February 2001 to 33% in March 2001. Where is the money invested?

Birla IT Fundís asset allocation in March 2001 also needs to be highlighted. Typically a growth fund has an equity allocation of over 80% and the rest is invested in fixed income instruments and cash. However Birla IT seems to have turned that on its head with a 64% exposure in the call money market, 33% in equities and 3% in cash/others.

Two things need to be noted from the developments in Birla IT's asset allocation. First, it reduced its exposure to the technology stocks just before the 'scam' took its toll on TMT valuations. Therefore, its unit holders have no reason to complain. Two, this also shows that technology funds may not be that good an investment idea, given their high level of exposure to just one sector. If, let's say the Birla IT fund, had been a diversified equity fund, it could have invested in the old economy stocks, which have done well over the last month or so. That way the fund would have maximised returns, rather than just attempting to preserve capital.

Equitymaster requests your view! Post a comment on "Birla IT Fund: Long on call". Click here!

  

More Views on News

The Top 6 Artificial Intelligence Plays in India (Views On News)

Dec 6, 2021

Investors looking to tap into AI theme need to keep an eye on tech firm leveraging the power of AI are making things possible.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

All You Need to Know about the Newly Launched Bharat Bond ETF 2032 (Outside View)

Dec 7, 2021

Bharat Bond ETF - 2032 is a new fund offer that will follow a buy-and-hold investment strategy tracking the constituents of Nifty Bharat Bond - April 2032 index.

Stocks You Should Buy, Even if the Market Falls (Profit Hunter)

Dec 7, 2021

Here is how to approach smallcap investing as markets get nervous.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Dec 7, 2021 02:50 PM

S&P BSE SENSEX 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS