Zurich India Top 200 Fund
  • Investment Objective: Long term capital appreciation
  • Fund manager: Bobby Surendranath
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  • Profile

    Formerly managed by ITC Threadneedle Mutual Fund, the Zurich India Top 200 Fund (ZITF) was taken over by Zurich India Mutual Fund in 1999. The fund was launched in September 1996 and is one month shy of completing 5 years.

    Over a 3-year horizon, the Fund's net asset value (NAV) has appreciated by a little under 8.9%. Its recent performance over 12 months has been encouraging despite a 16% fall in NAV as it outperformed the BSE Sensex, which fell 33% and the S&P CNX, Nifty which declined 28%.

    As on July 31, 2001, the fund's net assets under management amounted to Rs 302 million.

    Is this fund for you?
  • Entry load: 1.8%
  • Exit load: Nil
  • Risk: Moderate
  • Return: Moderate
  • ZITF is a moderate-risk, moderate-return investment proposition and is ideal for investors looking to create wealth over the long term (at least 18 months). Given the equity nature of the fund, investors who are below 50 years will find it a suitable investment avenue. However investors over 50 years should be looking at safer instruments like a gilt/income fund or fixed deposits, as their appetite for risk is far lower.

    Performance Analyses
  • Peer Table

    OPEN-ENDED, GROWTH FUNDS NAV(Rs) 1-WEEK 1-MONTH 12-MONTHS INCEP.
    TEMPLETON GROWTH G 11.2 0.2% 0.2% -12.4% 4.7%
    ZURICH TOP 200 G 13.3 1.2% 0.8% -17.4% -16.9%
    IDBI-PRI EQ G 7.9 0.4% 1.7% -29.6% -2.8%
    K 30 11.5 0.7% 1.3% -32.2% 13.9%
    JM EQUITY G 6.7 -0.3% 0.9% -40.7% -5.5%

    (Returns over 12 months are annualised)

  • Portfolio Strategy
  • Sectoral allocation
    The fund's portfolio wears a very defensive look with 20% exposure to FMCG (fast moving consumer goods), 14% - petroleum allocation, 9% - construction (and cement) 7% - banking/finance, 7% - engineering. It is bullish on pharma - 12%, while its exposure to software and telecom amounts to 12.3%, which is moderate. The fund has been quite consistent in allocations to its leading sectors, which seems to indicate that it will rely on these sectors to spur growth over the months.

  • Company allocation
    The top 10 companies in the fund's portfolio account for 47% of the fund's net assets, which means the balance 40 stocks account for 53% of net assets. 50 stocks for a Rs 300 m fund is a little too much, especially when you consider that there are about 15 stocks that account for less than 1% each. The fund seems a little too diversified, which is not commensurate with its small size. In terms of stock selection, the portfolio has defensive, large cap, blue chips stocks like Hindustan Lever, ITC, Nestle, Reliance Petro, Cipla, ACC, HDFC, BHEL, MTNL.

  • Outlook

    The Fund's high exposure to defensive sectors FMCG, petroleum, cement will insulate it from volatility in equity markets, which are triggered mainly by TMT stocks. The fund has a 'safe' look and will post a moderate to high growth especially since FMCG will look to benefit from rural prosperity from good monsoons, petroleum will benefit from deregulation and cement will ride on infrastructure growth. It also has pharma which many fund managers believe will benefit from increased research and development.

    Investment in the fund is recommended with a minimum 18 month investment horizon.


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