The Hindu Business Line : Magnum Multicap Fund

Magnum Multicap Fund is an open-ended equity scheme that seeks to invest in a diversified basket of stocks across various market capitalisation segments. Its present portfolio, however, predominantly consists of large-cap stocks with about one-tenth of assets invested in small and mid-cap stocks. The top three sectors in the fund — capital goods, construction and auto — together accounted for 50 per cent of the portfolio. The fund exposed 48 per cent of its assets to the top ten stocks. We look at how the fund shuffled its portfolio between June and August 2007.

Despite a marginal rise in the per-unit NAV, the fund’s assets under management declined by 10 per cent during this period. Textile and paper sectors stepped out of the portfolio even as exposure to energy, media and pharma was pruned. The fund reduced its holdings in BHEL, Thermax and Crompton Greaves, while Larsen and Toubro was added afresh. Ansal Properties and Infrastructure and Lanco Infratech were sold. IVRCL Infrastructure, Jaiprakash Associates and Nagarjuna Construction were retained but with reduction in exposure. The fund instead added Indiabulls Real Estate to its portfolio.

In the finance sector, the fund sold its holdings in Punjab National Bank and Oriental Bank of Commerce. Infrastructure Development Finance Corporation and UTI Bank were the new additions while the stock of ICICI Bank was accumulated.

While the tight interest rate scenario over the past few quarters had pushed down the sales numbers for many stocks in the auto sector, the fund continued to repose faith in select stocks in the segment as it stepped up exposure to Maruti Udyog and Balkrishna Industries. Holding in Mahindra and Mahindra was pruned. Tata Motors took the exit route.

Although IT stocks witnessed little participation in the recent bull rally, the fund appeared to view select IT heavyweights with optimism. While it accumulated Infosys Technologies, it nearly doubled the fund portfolio’s weight in Satyam Computer Services.

The pharma sector underwent a minor rejig. Cipla stepped out of the portfolio. Exposure to Wockhardt increased marginally even as the fund pruned holdings in Lupin.

The media segment was viewed with caution as the fund sold Dish TV and Wire & Wireless India. Zee Entertainment also witnessed some pruning.

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