The proposed balanced fund will have a minimum of 60 per cent invested in debt and a maximum of 40 per cent in equity of multinational companies to lower the risk profile of its portfolio and also ensure steady capital appreciation.

The trustees of the fund will be shortly mailing the option letter to unitholders to allow them to decide whether they want redemption or rollover within a specified period. Trading in old units of ICICI Premier will be suspended in November and investors will have to convey their decisions to the registrar to the scheme within the deadline set for the purpose.

However, there will be an extended deadline for new investors who buy units from the market before trading issuspended. In order to prepare a final list of unitholders, the repurchase facility is proposed to be suspended in early January 1999.

The ICICI Premier fund had introduced the repurchase facility for unitholders on February 7, 1997, three years from inception. Repurchases were being done at 3 per cent discount to the prevailing NAV. Now, the trustees of the fund have proposed redemption of units at NAV as on February 5, 1999 for those investors who seek redemption on maturity.

In view of the redemption/rollover option, replacement of units returned under objection will also have to be suspended well in advance to enable the registrars to compile the list of residual unitholders of ICICI Premier.

In lieu of replacement, stock exchanges would probably consider squaring off all pending and new objections after the date of suspension of trading in units of ICICI Premier. Trading will resume only after new certificates are issued to unitholders exercising the rollover option.

When the scheme wasoriginally launched on November 30, 1997 as a five-year close ended scheme, it was provided that the scheme might be extended by a year. Recently, Sebi's permission was received for extending the scheme up to February 7,2004.

However, the trustees of the fund now propose to reserve the right to either convert ICICI Premier into an open end scheme or extend it for a further period of five years with effect from February 7, 2004.

ICICI Premier, being a predominantly equity-oriented scheme, suffered major reverses in line with the broad-based BSE 200 index. The performance relative to the index was, however, better. The percentage change in its corpus since it became fully invested was -21 per cent compared to the change in BSE 200 by -38.4 per cent.

The performance improved dramatically after the restructuring of its portfolio in February this year. Its assets grew by 12.2 per cent between February 1998 and August 31, 1998. During this period, the BSE 200 showed a growth of -9.1 per cent.

Therestructuring involved reducing the number of scrips from over 100 to below 40 and increasing investments in infotech, pharma and fast moving consumer goods stocks.

As on August 31, 1998 the fund had a unit capital of Rs 147.14 crore and total assets of Rs 107.26 crore. The asset mix was 84.4 per cent in equity, 0.33 per cent in debt and money market instruments and 15.25 per cent in current assets.

The NAV of the scheme was Rs 7.59 on September 23, 1998 against Rs 7.29 on August 31, 1998. The latest available holdings show that the fund's top ten holdings are MTNL, HPCL, HLL, SBI, NIIT, Cochin Refineries, Software Solutions, Pfizer, Infosys Technologies and Cipla.