The Hindu Business Line : Principal Growth Fund: Finance favoured

Principal Growth Fund is a diversified equity fund that invests across market capitalisation ranges, with a bias towards large-cap stocks. The fund has 39 stocks in its January portfolio and the top 10 accounted for 38 per cent of the portfolio. We take a look at the changes in the fund’s portfolio during the six-month period ended January.

Banks replaced capital goods to make up 14.3 per cent of the assets. The fund has stepped up exposure to construction, finance and auto. It appears to have lost interest in the telecom space and exposure has been brought down from 7.5 per cent to 2.2 per cent. Capital goods, oil and gas, IT, petroleum and minerals also witnessed a cut in holdings. With increased asset allocation to the banking sector, ICICI Bank was added afresh while shares of Bank of Baroda were accumulated. The fund reduced holdings in State Bank of India and Axis Bank. It exited the stock of HDFC Bank.

Asset allocation to the construction sector was stepped up from 3.5 per cent to 12.5 per cent. In the recent meltdown, this sector was the one of the worst affected. Gayatri Projects and Jaiprakash Associates were the new additions to the portfolio. The fund accumulated the shares of B.L. Kashyap. Exposure to Madhucon Projects was trimmed.

In the last two quarters, the weight of the finance sector in the portfolio has moved up substantially. The stocks that represented the sector in the portfolio were JM Financials, Reliance Capital, Power Finance Corporation and recently listed Future Capital Holdings.

With stocks of the capital goods sector showing signs of overheating, the fund took a cautious stand and pruned exposure to top-rated stocks of the sector such as BHEL, Larsen and Toubro and Crompton Greaves over the past quarter. Instead, it has accumulated the shares of mid-cap stock KEC International. Kirloskar Electric and Voltamp Transformers were added.

Exposure to the IT space was gradually reduced over the quarters and frontline stock Infosys Technologies was the lone representative of the software sector. In the hardware space, the fund added recently listed Allied Digital Services to the portfolio.

In telecom, Reliance Communication shares were accumulated while Bharti Airtel exited from the portfolio.

The fund pruned the asset allocation to power stocks, selling its stake in Power Grid. Exposure to Tata Power was also reduced.

More Stories on : Mutual Funds | Mutual Funds | Portfolio Moves

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page