The 40-odd schemes belonging to 14 asset management companies (AMCs) have seen their NAVs appreciate by 3 to 30 per cent. On the other hand, the prices of these schemes are still subdued and have failed to reflect the gain in NAV.

While the units of some funds are rarely traded, market prices of a few funds are running at a hefty premium to NAV on account of redemption at a promised price.

``If this rally persists, buying may spread to the listed funds, thus giving an exit option with decent returns,'' points out a fund manager. Some of the close-ended funds, including ELSSs, also provide repurchase option with an exit load.

One fund which has outperformed the Sensex is MorganStanley. The NAV has appreciated by about 31 per cent to Rs 9.58 from Rs 7.33 on January 29, 1998. However, the market price of units on the BSE has remained static at Rs 6, which translates into a discount of 36 per cent to the NAV.

After restructuring, the top 10 holdings of Morgan Stanley Growth Fund (MSGF) account for 63 per cent of the portfolio as on December 26, 1997, which includes BHEL, Infosys, SBI and Cipla. ``With the market price at a hefty discount to the prevailing NAV, it is also the right time to enter some of these funds on the assumption that the rally continues. "However, it is important to be judicious since in some funds, the discount may continue to exist,'' says a Mumbai-based fund manager. It is here that open-ended equity schemes are a superior product since an investor can enter these funds, depending on his market perception, book profit and exit when the market rallies.

A distant second in the list of gainers is Centurion Quantum. The fund's NAV has moved up by 23 per cent toRs 7.68 as on April 6 from Rs 6.26 while the market price has moved up from Rs 4 to Rs 4.30 or 7 per cent. Here, the discount to NAV is 44 per cent.

Centurion Quantum can be a good buy with an overhaul of its portfolio in 1997. All other gainers (with an appreciation of 20 per cent and above) belong to the UTI stable and include Mastershare, MasterPlus '91, Equity Opportunity Fund, MEP '93 and UGS 5000. With more or less identical portfolios, it is no wonder that these funds from UTI have notched up a similar (21 to 22 per cent) appreciation in NAV. The next two from UTI, Mastergrowth and UGS 2000, have gained around 19 per cent.

Some of the ELSS schemes have also gone above par, thus giving an exit option to investors. For instance, NAV of Canpep '93 has moved from Rs 9.92 to Rs 11.72. Magnum Taxgain from SBIMF has also seen its NAV cross the crucial barrier. The NAV is currently at Rs 10.07, up 18 per cent from Rs 8.49. Some of the funds where the NAV has failed to gain by 10 per cent or more includeReliance Growth, Canstar and Cantriple.

In the case of Reliance Growth, the NAV has moved up by 9.65 per cent to Rs 13.63. For the fund, its exposure to debt instruments is a necessary evil - a drag on NAV in the event of a rally while it controls damage in case of a market slump.

A few funds in a desperate need for continuity of this rally are those with a promised return on redemption. Here, the price is at a hefty premium to the NAV and does not reflect the true worth of the portfolio. For instance, Double Square Plus units currently trade around Rs 257 while the NAV is Rs 221.

The fund is to be redeemed at Rs 400 in 2000. SBIMF's Magnum Triple, to be redeemed at Rs 300 next year, trades at Rs 244 while the current NAV is Rs 195. The fund's NAV has moved up by 12 per cent from Rs 173 on January 29. The worst off is Canbank MF's Cantriple, where the NAV has moved up by a mere 3 per cent to Rs 16.24 while the market price is Rs 19.5. The fund is to be redeemed at Rs 30 next year.