Financial Daily from THE HINDU group of publications
Sunday, Dec 01, 2002

Investment World
Port Info

Group Sites

Investment World - Mutual Funds
Markets - Mutual Funds

The Alliance'95 Fund: Sell

S. Vaidya Nathan

INVESTORS in The Alliance'95 Fund can contemplate cutting exposures despite its impressive performance over a seven-year period and fairly good performance in the last year. The possibility that Alliance Capital may decide to exit the Indian markets (it has appointed an advisor to look at strategic options for its mutual fund business in India) is reason enough to cut exposures in this balanced fund with a distinct style that has paid off.

If Alliance Capital is taken over by any other fund house, there are some significant implications, especially for The Alliance'95 Fund. Alliance' 95 has always been a highly aggressive balanced fund, with 65-80 per cent exposures in equities at various times (it is now around 68 per cent).

Within this high equity basket, the fund has always maintained an aggressive sector and stock selection approach. Its technology/telecom/media exposures were well in excess of 55 per cent of assets in 1999-2000 and even now it is fairly high at around 25 per cent. The fund, however, has had returns to show for this and has compensated for the risk with a 24 per cent return per annum every year since 1995.

No other balanced fund has adopted such an aggressive approach. If any other fund house takes up the fund, even if it decides to maintain the distinct positioning, there will be question marks on whether the fund management style will continue.

Further, if the firm that takes over Alliance decides to merge this scheme with its in-house balanced fund, it could prove disadvantageous for investors in The Alliance'95 Fund.

Almost every potential bidder already has a balanced fund in its basket of schemes and, barring Zurich, none with as good a track record. So, a merger cannot be ruled out entirely.

With this big uncertainty looming large, investors — especially those who entered early — in the Alliance'95 Fund can contemplate moving out now.

It may not be worth the risk of waiting for some concrete action and indications from the would-be buyer before taking such a decision.

Send this article to Friends by E-Mail
Comment on this article to

Stories in this Section
BSL open offer: Accept

No demat account closing charge
What is loss aversion?
`Overseas markets will account for 30% turnover in 2 years'
Pharmaceuticals — Health is not necessarily wealth
Generics and contra-indications
Charge your mobile
Taj-Delta SkyMiles
Concessional air fares too go up
More flying options
Automobile industry: Vrooming ahead
How many funds make one diversified?
Three is good company

It's returns that count
A question of choice
L'affaire Grasim-L&T: Losers all
Growing reserves and uncertainty
Grasim's missed calculations
The Alliance'95 Fund: Sell
G-Sec funds: SEBI's new checks and balances
Zurich India Capital Builder Fund: Switch
Franklin India Infotech Fund: Sell
Alliance Frontline Equity: Hold
Towards regulated selling
Wipro: Cut exposure
Gujarat Ambuja: Pare Exposures
Goodlass Nerolac: Hold/Buy on declines
Escorts: Hold
West Coast Paper: Hold
Tata Chemicals: Buy
Term assurance policy: A plain cover
Computation of bonuses
HLL may seek higher levels
Short-term uptrend in Tata Tea
Nasdaq: Downward correction likely
Growth in car sales jacks up Tata Engg
Bonds carry downward bias
Positive week for HPCL
Contract size and corporate actions
Options guide
Futures guide
HDFC: Well-covered
Bharat Overseas Bank's floating rate scheme
Capital gains tax — Time limits for saving tax
Exemption on sale of house
HSBC Income Plan: Unattractive
HSBC Equity Fund: Unattractive
It Adds Up!

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line