The closed end fund is managed by Jardine Fleming International Management which had assets worth about $17 billion under management as on November 39, 1997.

The fund's objective is to achieve long-term capital appreciation by primarily investing in Indian equity. Its constitution also provides for investments up to a maximum of 10 per cent of its assets in equity of companies in Pakistan, Sri Lanka and Bangladesh.

As on November 30, 1997, the fund invested 89.8 per cent of its assets in Indian equities. Its annual report provides a brief commentary on the major companies and their future earnings outlook. Hindustan Lever is expected to achieve "above average growth for years to come". According to the report, the company possesses an"unparalleled distribution system" and its return on equity of 40 per cent is evidence of its "outstanding" management.

On ITC, the report observes that the management's focus on the core businesses is increasing its already strong cash flows. Other major holdings include Hindustan Petroleum, MTNL, VSNL and Reliance Industries. The fund's investment review observes that "India remains a growth story, and buying into this growth is not expensive as the political and currency concerns depress share prices."

The report notes that mandatory scripless trading has commenced in certain scrips and sale of government-held stock is adding liquidity to the market. Besides, corporate disclosures are improving and brokerage rates have been reduced. "In addition, share availability is being effected more quickly," it adds. According to the review, since mid-1997, the fund adopted a defensive approach to investing. "The investment manager's early recognition of regional deflation resulted in profit-taking on variousholdings whose activities are in the commodity sector such as steel, aluminium and petrochemicals."

The fund continues to be overweight in basic consumption products such as cigarettes and toiletries. "Additionally, India's two monopoly telecommunications companies provide quality earnings and a safe operating environment," the review states. However, post-finalisation of accounts for the year ended November 30, 1997 the portfolio composition has been radically altered with ITC out of the top ten holdings (weightage on November 30, 1997, was 7.5 per cent). Major additions include State Bank of India (8.4 per cent against 3.8 per cent at 1997 year-end), Larsen & Toubro (five per cent against 0.1 per cent) and MTNL (7.3 per cent against 4.9 per cent). The fund has partially diluted weightage of HLL to 10.7 per cent against 11.7 per cent.