With a current NAV of Rs 9.76, the fund has a 15.45 per cent exposure to HLL and a combined investment of 16.08 per cent in Infosys and NIIT. Chola Freedom Growth also has 6.74 per cent exposure to ITC. The portfolio holds a total of 18 stocks that translates into investments in 13 different sectors. Given the fund's small size, this makes it look overly diversified. The fund carries an entry load of 1.5 per cent while there is no exit load. According to the fund manager, the fund's strategy of investing in defensive and non-cyclical stocks has resulted insteady out-performance.

With important macro-economic indicators still not pointing to any immediate recovery, continuing with the current strategy is likely to result in continued outperformance. ``Considering the attrcative valuations available across many sectors, the fund will actively look at investing surplus cash in highly undervalued commodity stocks or take views on new high growth sectors,'' the commentary says.

In Chola Freedom Income, at least 80 per cent of the corpus is invested in high quality debt securities with credit rating of AA and above. As on October 30, 1998, the fund has a 62.4 per cent exposure in bonds and debentures and the rest in money market securities. The fund holds three instruments of SAIL (34.3 per cent), Ashok Leyland Finance (23.3 per cent) and ITI (4.7 per cent). The average maturity of the portfolio is 1.52 years with an YTM of 13.22 per cent. The fund has given an return (ann) of 8.61 per cent since inception.

With a size of Rs 14 crore, Chola Triple Ace has beenthe most volatile income fund in the fund industry since it invests only in AAA rated securities as per its investment charter. These securities are the first and the most affected in case of a sudden change in interest rate scenario.Given the low interest rate scenario, the fund has a YTM of 12.42 per cent and has given an annualised return of only 8.24 per cent in the last three months. The average duration of the portfolio is 1.62 years. Since inception, the fund has given a return of 15.12 per cent. The fund has declared an interim dividend of 5.5 per cent for 1998-99. Chola Triple Ace has a 93.7 per cent exposure to debt instruments with the rest in money markets. The instruments include ICICI (13 per cent and 15.5 per cent), SBI-FRB, Reliance Industries (13.25 per cent and 14 per cent), Reliance-H and L&T. As per the fund manager, with inflation set to increase steadily with rising money supply and possible stagnation in agriculture produce, interest rates are likely to increase in the medium term. Thefund plans to continue with its strategy of investing in floating rate bonds and debentures of shorter maturity.