On November 13, the net asset value of Templeton India Growth fund (TIGF), for the first time, fell below the par value since launch in August, 1996. Currently, the NAV stands at 9.55.

All the while, the fund has moved in tandem with the market. In the past one month till date, the fund has fallen by 16.3 per cent while the BSE Sensex and National index have dropped by 16.8 and 16.3 per cent, respectively. Further, since August 5, 1997, when the market peaked at 4548 (sensex) and 1980 (national index), the indices have fallen 24 per cent while TIGF has fallen by 25 per cent.

TIGF seeks to provide long term capital appreciation primarily through investment in equity instruments. TIGF mopped up Rs 50 crore at the time of its launch. The assets under its management have doubled since then and stand at Rs 101 crore as on September 30, 1997.

J Mark Mobius is the fund manager. The fund took one full year to beef up its equity component. Now, TIGF is fully invested in equities with more than 90 per cent exposure to stocks and the rest in cash. The fund believes in value investment. A value stock is one that is out of favour and underpriced but offers lucrative investment opportunity from a long-term perspective.The non-resident fund manager, Mobius seems to be betting on the country and the domestic fund is being managed like a country specific fund. The fund has picked up `value' scrips of `truly Indian companies'. The fund has no MNC stocks in its portfolio. The funds portfolio has a large-cap orientation with predominant deployments in petrochemicals, energy, cements, banking and finance, textiles and automobiles. The portfolio suggests a balanced sectoral weighing. Interestingly, the fund has absolutely no exposure to Infotech stocks. But for Titan Industries, the fund has nil investments in consumer durables and the hospitality sector.

TIGF has substantial investments in PSU scrips accounting for 43 per cent of its assets. PSU petroleum and banks & FIs scrips round account for 13 per cent each. MTNL and HPCL figure as the top two while others include IPCL, BOB, ICICI, NALCO, IDBI, OBC, Shipping Corporation of India, SAIL, BPCL, SBI and HOC.

Next in the list are companies form the Tata stable - Telco, Tisco, Titan Industries, Tata Chemicals and Tata Hydro which sum up to 14.7 per cent of the equity base. Another 5.5 per cent is invested in AV Birla group companies namely Indian Rayon, Grasim, Indo-Gulf and Hindalco.

The fund follows a disciplined approach to investments and holds on to its stated strategy. With the rapid fall in the market, the fall in the fund's NAV is inevitable. The fund is not as unpredictable as weather but is just as predictable as the stock market. TIGF is an open-end fund and carries an exit load of 6 per cent on investments of less than one year. The ideal way to enter the fund could be a systematic investment plan.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.