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Sunday, Apr 14, 2002

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Pioneer ITI FMCG: Pare exposures

WITH returns of around 12.6 per cent since launch, the Pioneer ITI Index Fund has comfortably outperformed the BSE FMCG index, which lost 22 per cent in value since the fund's launch.

However, given the relatively high valuation levels for the universe of FMCG stocks now and the poor industry growth rates in recent times, this sector appears unlikely to outperform the broad markets in the event of a further rally in equities.

This is also evident from the trend over the past quarter. Between December 2001 and now, the BSE Sensex has returned 15 per cent in value, while the BSE FMCG Index managed a mere 2 per cent. Though the Pioneer ITI FMCG Fund, generated higher returns of 6 per cent, has still trailed the narrow indices.

The fund's portfolio is less frequently churned than some of the other Pioneer ITI funds. The fund made the following changes to its portfolio between February 28 and March 31:

Stocks added: No new addition was made over this period.

Stocks sold: The fund completely liquidated its holdings in Zee Telefilms and Reckitt Benckiser over this period.

Holdings enhanced: The fund added to its existing holdings in Britannia and Bata India during the month.

Holdings pared: Exposures were pared in ITC, SmithKline Consumer, and Godrej Consumer, leaving all other holdings unchanged.

Fund facts: The Pioneer ITI FMCG Fund was launched in March 1999. The fund is open-ended and charges an entry load of 2 per cent. It is managed by Mr K. N. Sivasubramaniam. The co-sponsors of Pioneer ITI recently announced a proposal to sell their stake in the AMC to the Franklin Templeton group.

However, given that the plans for the schemes and the fund management team are still unclear, this may not have any immediate bearing on investment decisions.

Aarati Krishnan

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