Alliance '95 seeks long term capital appreciation and current income. The fund is available in two flavours - dividend plan and growth plan. The current income is to be generated through investments in debt instruments which will provide earnings in form of interest of which 90 per cent will be distributed annually as dividend under the dividend plan. Dividend declared will be re-invested in the growth plan. The equity component of the portfolio will take care of the growth objective in the two plans.Samir C Arora, the Chief Investment Officer has been with Alliance Capital since 1991. Since 1993, he has been the research director of Alliance Capital's India Liberalisation Fund. He has been the fund manager of Alliance '95 since its launch. Alliance '95 follows a top-down aggressive growth oriented strategy for its equity portfolio. Alliance '95 was among the first domestic funds to take an exposure in the infotech sector, acquiring Infosys and Stayam at an average price of around Rs 450 and Rs 45respectively, way back in September, 1995.
Over the years, the fund gradually increased exposure (partially helped by appreciation) in the sector from around 8.5 per cent to 38.31 per cent by September, 1997. This happened while the fund moved out of the automobile sector and small cap IPO stocks.
The fund has also increased presence in FMCG and pharma while maintaining exposure in finance and engineering. The fund has also gradually decreased exposure in debt to current levels.
Riding on the infotech boom, Alliance '95 has been the best performing open end fund in 1997-98. Its recent performance more than compensates the two years of non-performance. Investments in Infosys have been particularly rewarding with a yield of over 400 per cent between March-September, 1997. This period also witnessed consolidation of its infotech holdings.
Over the past six months, Alliance '95 has reduced exposure in infotech to 20 per cent, booking profits in Satyam, Infosys, Masteck and Digital while entering NIIT,Tata Infotech and BFL Software. The fund has increased exposure in FMCG, pharma and petrochemicals. The fund has also marginally increased exposure in debt. Post-budget, the fund has been more volatile than an average balanced fund, its marginal debt exposure unable to cushion the fall in its aggressive equity portfolio.
After heavy redemption till March, 1998, the fund's capital seems to have stabilised. Yet, given the fund structure its likely to be very volatile. The fund is a strict no for the conservative balanced fund investor.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
