November 2: ITC Threadneedle's Top 200 seeks long-term capital appreciation from a portfolio of equity investments in the largest quoted Indian companies.

Top 200 Fund invests 95 per cent of its corpus in equities, which include scrips from the BSE 200 index. Thus, BSE 200 serves as a benchmark for portfolio composition and performance measurement for the fund. The growth fund from ITC Threadneedle offers redemption at net asset value, which is revised on a daily basis.

Top 200 fund has a brief history. The fund was launched in August 1996. The focussed portfolio strategy pursued by the fund has worked very well till now. The predefined universe of equity investment by its charter, makes it mandatory for the scheme to orient investments towards large-cap stocks.Top 200 has been among the top performing equity funds in the fist half of the current fiscal. The fund has appreciated by 25.32 per cent in the past six months while the major benchmarks could manage only around 15 per cent.The fund has gained by 29.71 per cent for the year ended September 30, 1997. for the quarter under consideration, Top 200 has added six new scrips - Otis Elevators, Punjab Tractors, BHEL, Clariant, Reckitt & Colman and TVS Suzuki to its list of holdings.

Moreover, the fund has increased its exposure in ten stocks. Infosys, NIIT, Ingersoll Rand, VSNL, Thomas Cook and Thermax are among the scrips where the fund has added to its previous holding. The fund has reduced its exposure in ten stocks while maintaining exposure in eight scrips. As on September 30, major industry exposure includes Infotech, consumer non-durable, automobile and petroleum.

The fund should outperform its benchmark with the portfolio being a selection from the index constituents itself.

Now, in a turbulent market, the fund looks like an ideal vehicle to seek equity exposure for the retail investors. Top 200 has been available for continuous sale and repurchase since December 4, 1996. While in April this year, the fund had dropped its entry load to 1 per cent, the same has been increased to 3 per cent.

In fact, while a number of funds have either reduced or done away with their entry or exit loads, ITC Top 200 and Reliance Vision have increased their load in the recent past. This could mean a increased distribution thrust by these funds.

As of October 24, Top 200 has a net asset value of Rs 12.8, which is also the redemption price. The entry price at the NAV is Rs 13.18, which highlights the 3 per cent load in the fund.

So far, the fund has succeeded in putting up an imprssive performance due to its focussed investment strategy. However, in the event of a sustained rise in the market, the predefined objective of investments in 200 stocks is likely to prove as a constraint for the fund.