The Hindu Business Line : Tata Infrastructure Fund: Capital goods preferred

Funds focused on the infrastructure sector have outperformed the average diversified fund over the past three months. Here, a look at how Tata Infrastructure re-shuffled its portfolio between June and August. It increased exposure in banking, cement, capital goods, oil, petroleum products and telecom services, and pruned holdings in construction and consumer durables.

The fund has 55 stocks in its portfolio, of which the top ten account for about 35 per cent of the asset allocation. The fund is concentrated in a few sectors such as capital goods, cement and construction. Together, they account for about 60 per cent of the assets. BHEL shared the top slot in the portfolio with Siemens.

Sectors: Capital goods is the fund's preferred choice. Making a minor re-jig in the portfolio, the fund booked profits in Bharati Shipyard, Emco and BHEL. Exposure to State Bank of India, the only banking stock, was enhanced.

The fund booked profit partially in cement stocks during the May correction, after which it appears to have found value again in the sector and stepped up the asset allocation. Fresh stocks were added to existing holdings in ACC and Gujarat Ambuja Cements. The exposure to Grasim Industries was reduced.

Several funds pared exposure in the petroleum products sector last year, when it was an under-performer. This year the story is different, and many funds have been increasing allocations to the sector. Tata Infrastructure stepped up holdings in HPCL and Reliance Industries. Its investments in telecom stocks almost doubled during the period. MTNL found special favour, with holdings in the stock increasing 2.5 times. Bharti Airtel was added afresh, while VSNL was the only stock to be moved out of the portfolio.

Ferrous metals saw a few changes. The fund sold Tata Steel, PSL, and Jindal Saw. Sesa Goa was the only stock that remained in the portfolio and the exposure in it has been increased. Hindustan Zinc and National Aluminum were moved outfrom the non-ferrous metal space, and exposure to Hindalco increased.

The construction sector's weightage in the portfolio has come down in tandem with the market. The fund reduced its exposure to several stocks such as Unitech, IVRCL Infrastructure, Gammon India and Hindustan Construction.

: Tata Infrastructure was launched in December 2004 and is managed by Mr M. Venugopal.

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