The Hindu Business Line : Tech funds regain lost ground

NET asset values of technology funds are inching up, thanks to upsides recorded by tech stocks, including such leading ones as Infosys and Wipro, both of which are constituents of the major indices.

With nearly six per cent returns, scored over a period of one month (as on April 21), the tech plays seem to be regaining some of the ground they had lost. While they are not big talking points yet in investment circles, it is clear that more sections are following their NAVs than before.

Mutual fund sources indicate that investor interest in these schemes is coming back, albeit in a limited manner. Some informed sections, they add, are taking positions in tech with the hope of recording further gains. It is particularly felt that some of the frontline stocks in the IT consulting & services sector, to which fund managers attach a lot of importance, have a good scope of appreciation.

The IT stocks included in Nifty and Sensex are worth mentioning here. The likes of Infosys, Satyam, Wipro, Bharti and Zee have all posted positive returns over the past month, ranging from approximately 3.7 per cent (Infosys) to 23 per cent (Bharti) as on April 20. In the middle ground stand Satyam (7 per cent-plus), Zee (7.5 per cent) and Wipro (12 per cent).

"It makes sense to take an exposure to these funds this juncture," observed a fund manager with a large house. "Tech companies have generally not participated in the rising trend seen in recent months and investors have paid attention to other sectors. But some of the leading IT names have done well," he added.

Besides IT consulting & services, some of the biggest allocations have gone to computer hardware, integrated telecom services, broadcasting & cable television, electrical components and entertainment. For MF investors, however, 100 per cent tech options are shrinking in number as some of the players have converted their sector-specific products into more broad-based vehicles. Among the latter are funds managed by Birla, Templeton, Chola and IL&FS.