The Hindu Business Line : Morgan Stanley Growth Fund climbing steadily

MORGAN Stanley Growth Fund (MSGF) is riding the bull market well with its units now quoting at well over Rs 25 on the bourses. The fund, a 15-year close-ended vehicle, will come up for redemption in a few years.

MSGF, which closed at Rs 25.60 on Friday (August 12) on the NSE, has been moving up steadily in recent times, in tandem with the advancing market.

Investment circles say the fund has gained smartly from the growth that the stocks in its portfolio have recorded. Its portfolio is led by counters such as BHEL, Infosys, ONGC, ITC and Siemens.

The BHEL counter, the no. 1 holding which comprised over 7 per cent of the net assets in end-June, has doubled (from Rs 500-odd to over Rs 1,000) in the past 52 weeks.

MSGF, flagged off in early 1994, now has a net asset value of about Rs 31. Historically speaking, the NAV had once reached a low of less than Rs 7. However, in the backdrop of a rising market, things have changed.

The situation, according to Mr Dhirendra Kumar of Value Research, may present a case for investors to retain the units, especially because the fund's 15-year lifespan is set to end quite soon. An investor who redeems at this stage will get Rs 25 or so as against an NAV of Rs 31-plus.

Alternatively, an investor will currently have to shell out Rs 25 to acquire a unit worth Rs 31-plus. One has to decide whether such a `discount' is substantial enough for his or her purposes - that is, if it will suit the risk profile concerned.

If the discount is indeed considered substantial, fresh purchases can be thought about. It is also suggested that an investor may weigh the possibility of buying MSGF's units at regular intervals, like an SIP. The MGSF portfolio features a mix of stocks, representing sectors such as engineering, capital goods, auto and banking.

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