Quantum Long Term Equity Not rocking the boat

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Quantum Long Term Equity Fund is an open-ended scheme with an objective to achieve long-term capital appreciation by investing primarily in shares of companies that will typically be included in the BSE-200. The fund follows a value-investing style.

Over the last six months the asset size of Quantum has grown by 32 per cent even as some funds floated during the same period saw erosion in their assets.

The fund prefers to limit its portfolio to 20-40 stocks and exposures to any single stock below 6 per cent of the assets. Its mandate permits the fund to hold cash up to 35 per cent and it used the option during the peak rally until May 10. The fund preferred value picks rather than momentum plays, with sectors such as construction and metals not finding a place in the portfolio. Here is a look into the portfolio changes made during the period between September 2006 and February 2007.

The fund preferred to accumulate stocks it held rather than make new additions. Only few stocks, such as Aditya Birla Nuvo, Gujarat State Petronet, Hero Honda and Wire and Wireless India, were the new faces in the portfolio. Software continued to enjoy the support of the fund and retained the top slot in the portfolio. Frontline stock TCS and mid-cap player 3i Infotech were added afresh, while Infosys and Geometric Software Solutions were retained without any significant change in the holding.

In the banking space, HDFC Bank was the new entrant. Corporation Bank was accumulated.

ING Vysya Bank and State Bank of India were other stocks from the sector.

Arvind Mills, which has fallen close to 50 per cent over the past six months, continued to find favour and was added to. Exposure to Aditya Birla Nuvo and Raymonds were enhanced.

Pharma stocks, despite underperformance, continued to corner on an average 8 per cent of the portfolio. Ranbaxy, Aventis Pharma and Dr Reddy's Laboratories were added to the existing ones.

In the auto space the fund enhanced exposure to Tata Motors, while holdings in Bajaj Auto remained unchanged.

Quantum Long Term Equity was launched in February 2006 and is managed by Mr I. V. Subramaniam. The fund distributes its products directly and does not have any distributor's network.

Suresh Parthasarathy

(This article was published in the Business Line print edition dated March 18, 2007)
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