The Hindu Business Line : HDFC Tax Plan 2000: Hold/Avoid fresh exposures

INVESTORS in the HDFC Tax Plan 2000 can stay invested. The fund has performed well since launch, and has turned in returns of 13.1 per cent since January 2001.

During the same period the market has been down about 12 per cent. The fund has stood apart from most of its peers in equity funds by adopting an investment approach focussed on mid-cap stocks.

There is a possibility of a change in the profile of the scheme as HDFC Mutual Fund acquired Zurich India Mutual Fund. The latter's Zurich India Tax Saver may be merged with HDFC Tax Plan 2000. Zurich India Tax Saver is among the top performers in equity schemes.

But following the merger, the size of the fund may become too large to run on a mid-cap-centric theme. In this backdrop, it may be better to avoid fresh exposures in HDFC Tax Plan 2000 now. Unitholders can rather wait for the merger to go through and evaluate an investment decision later based on the trend in performance for a few months in the post-merger period.

Stocks in: No new stocks have moved into the portfolio.

Enhanced exposures: The fund has stepped up exposures to Procter & Gamble, State Bank of India, Monsanto Chemicals, Berger Paints, Goodlass Nerolac, Alfa Laval, Bluestar, Heritage Foods and Vesuvius.

Stocks sold: The following stocks have exited the portfolio: Atlas Copco, Marico, Satyam Computer, Unichem, Aventis Pharma and GlaxoSmithKLlime Consumer.

Pared exposures: The fund has not pared exposures in any of its holdings.

Fund flows: The fund has attracted sizeable inflows in March 2003. The assets are up by 11.1 per cent while the NAV was down by 4.8 per cent. At end of March 2003, the net assets were Rs 8.5 crore.

Fund facts: HDFC Tax Plan 2000 was launched in January 2000. The fund offers entry at a load of 2 per cent.

S. Vaidya Nathan

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