Top 200 seeks long term capital appreciation by investing in a portfolio of equities drawn from the BSE 200 Index. The fund aims to achieve its stated objective by investing upto 95 per cent of its corpus in equities and balance in debt and money market instruments.

Currently, the fund has a 90.36 per cent exposure in 33 stocks. The balance is invested in money markets. The Top 200 fund by definition invest in large cap stocks. As on December 31, 1997, over 78 per cent of its exposure was in stocks with market capitalisation of over Rs 1000 crore. Only three stocks have a market cap of less than Rs 500 crore.

The fund claims to follow a bottom up approach in selecting stocks. Yet the fund manager does seem to have sectoral preferences with infotech,pharmaceuticals, consumer non-durables, petrochem and telecom together accounting for around 65 per cent of the exposure. With a maximum limit of 200 stocks, the fund seems to be following a growth oriented strategy in picking stocks. The 33 companies in its portfolio have seen around 67.04 per cent weighted average growth in earnings over the past three years. These companies have also seen a strong growth (weighted average 60.65 per cent) in sales during the period.

With a weighted average book value per share of 139.98 per cent and an earning per share of 85.25 per cent, most of these companies are fundamentally very strong. Moreover these stocks enjoy tremendous market fancy. The weighted average price earning of the portfolio is 37.97 per cent while the price to book value ratio is 9.45 per cent.

Top 200 has a brief impressive history. Since its launch in September, 1996, the fund has appreciated by an annual rate of around 22.65 per cent. But for the initial few months, the fund has managed tostay above par while the market continued with its roller-coaster ride in the past one and a half years. The fund recently touched its all time peak of Rs 15.43 (April 21).Top 200's biggest asset is its structure. Unless the fund manager does some thing drastic, the fund is unlikely to go wrong. Till date, the fund has beaten it benchmark index consistently. With NAV at its historic high, it may not be prudent to commit heavily to Top 200. The best way to invest in an equity fund is gradual entry through systematic investment plan. The fund charges a 3 per cent entry load on fresh subscription. With little difference between the investor servicing of various funds, this could be the only reason to prefer Birla Advantage.